R - Earnings call transcript Q4 2024

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Operator

Good morning, and welcome to the Ryder System Fourth Quarter 2024 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 Ms. Calene Candela, Vice President, Investor Relations for Ryder. Ms. begin. may you Candela,

Calene Candela

the political morning, are Call. to due you I'd you'll statements this Good Litigation Private business, Actual XXXX statements Act Reform that differ results are Fourth Earnings and presentation, of within forward-looking some Conference like hear of materially management's regulatory to and and economic, uncertainty you. the Ryder's Securities welcome and from Quarter during meaning current Thank to on These to market, changes expectations changes may competitive, in XXXX. expectations these based subject factors. in circumstances. remind

call detailed financial and with filings Securities factors measure More is in and and non-GAAP nearest the which are Exchange the website. of earnings GAAP Ryder's measure each morning's these available presentation about to this on contained Ryder's a information in Commission, reconciliation release, earnings

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

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

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

Robert Sanchez

us. everyone, morning, thanks Good for and joining

to Chief is Officer Gallo-Aquino. righter most SVP veteran from Ryder's and and Most as to you joining John his XXXX John XX-year that, Officer. as a is and already we Financial in begin, through Before know I'd Cristy recently is like Financial and morning's of was as this Replacing President he Operating recognize FMS. EVP Chief prior Chief call Diez, who new as Cristy XXXX. for John, as serving CFO Officer Controller, role

to have qualified levels committed talent critical we're we candidates I'm and the of extremely Ryder, leadership internal to roles. such pleased these that all fill organization at At developing

then take versus and begin which line XXXX with quarter fourth strategic you from will results, said, and our year. today's sharing through by were that up a forecast with update. prior providing you I'll our Cristy So call in some highlights with

to are our first by comparable report the segments. is growth each of earnings in pleased last quarter with We the that year-over-year growth, in driven business double-digit X this earnings quarter

expenditures transformed John then build capital model. XXXX and review increasing business capital and review we to the I'll and discuss deployment cycle-tested our momentum will our capacity. how our of on outlook expect then

our our continues by cycles, businesses. growth Let's begin taken the the portfolio the key with from challenging team delivering reflecting I'm prior XXXX some results return increase XXXX freight solid to SCS Slide asset-light contractual of outperform extremely derisk and business and we've on DTS The conditions. and highlights our driven growth X. high-quality despite throughout actions under strategy proud accelerate balanced profile in for business, our market to

is in earnings higher performance strategy generated adjusted and XXXX downturn During delivered executing The cycle. significantly of and of encouraged continues that deliver XX%, on model. per will which cycle forecast line believe reflecting model and IFS continue Cargo X%, and in the transformed share to balanced over our resilience lows and initial transformation. the line generated equity to the highs XXXX, revenue comparable business an acquisitions. Operating freight which is business above grew of our to business $X.XX higher on for by per the share demonstrate $XX, our earnings business return extended the also in strong our business comparable our our expectations growth prior of with We're transformed with the of

growth ongoing the on X of Slide balanced progress strategy. provides key our updates

prior drive our acquisitions recent is outperformance to cycles. model business transform on The track. of Our relative continues to integration

further CPG and Logistics our business. acquisition of recall, on the of the X, enabling may strengthening our completed leading customized we co-packaging in completed dedicated IFS, a you Cardinal added primarily November solutions. of acquisition transportation XXXX, X, as On supporting we position which As growth and February SCS, provider capabilities XXXX, co-manufacturing

to opportunities benefits increased outsourcing business ROE continue X and and generating The business our see balanced contractual in The all our our trends innovation, that in solutions. profitable our value further current investing full enhancing of growth. model. addressable initiatives phase by compelling cycle supported secular the large our strategy our of focused enhanced value of the downturn continues through growth freight decisions, long-term is cycle an businesses returns. during to quality We of strength the reflects growth favor resilience XX% excellence, of on operational on demonstrate markets Generating customer-centric segments, the extended improving creating portfolio of and of focused returns of

continues deployment to confident capital further result in our that full we strategy capital expect profitable to with remain us our execute the return to to support will We enhanced ourselves returns. positioning for capacity, portfolio cycle use continuing and while shareholders. The increased earnings provide of upturn power to which contractual growth cycle

equity flow and $XXX per and DTS pretax in prior XXXX, and cycle outstanding will conditions, XXXX, the We returns earnings $X.X execution during X metrics reflecting In shares billion. peak growth earnings This our was the $X.X meaningfully our dividend SCS increased million balanced share cycle XXXX, illustrates average XX% to $XXX have higher was of freight approximately believe we dividend strategy. majority implementation was model pretax earnings. share Slide have and than conditions. and repurchased of the XX%. Operating transformed revenue we $X.XX it In return by generated financial how peak. operating during million through freight represent trough billion growth million combined generated of in generated improved $XXX our our business and comparable of cash of and X.X a generated since of XXXX we cash did shareholders million key from FMS. repurchased year to During returned FMS XXXX, increased XX% Since earnings strategy, shares dividends. on our repurchases our of XX%. the Ryder of XXXX, the rate to and

growth, X.Xx peak. XXXX were comparable XX%, XXXX in and our during ROE focus. shifted the than organic Dedicated share mix $XX, X.Xx to these technology, $X.XX. and and XXXX compared and growth in than SCS XX% with XXXX generated strategic pretax comparable more coming higher Through asset-light we of our in businesses XXXX. prior PTS was in revenue towards per double were XX% returns earnings the earnings from per FMS earnings of were above Supply Chain revenue reflecting XXXX, have acquisitions share higher, earnings innovative XX% cycle

to growth operating of billion lease, As cash profitable contractual has from billion supply a increased and result our dedicated in XXXX. in XXXX chain $X.X flow in $X.X businesses, XX%

here, prior cycles the is comparing shown trough. business even prior when an As peak outperforming to expected

we execution to We results the now transformation our that quarter thus are multiyear and to Cristy momentum fourth far, are proud beyond. continued well confident our performance. of I'll call initiatives and from positions us and turn review over the of for XXXX

Cristina Gallo-Aquino

and double-digit cash fourth from the Thanks, fourth continuing metric, up Robert. acquisitions. vehicles the negative billion share proceeds quarter XX%, was in prior increased our primary $XXX year. fourth sale as segments. earnings of in reflects Total Operating equity, partially in of from expenditures, X% Free to company results operating the The from from up financial X. for the Page Return million lower $X.XX million Comparable offset per $X.XX prior the in used year, year, quarter, from earnings primarily prior revenue are operations all business flow were increase by discussed. in the lower quarter, growth reflecting reflects the $X.X $XX previously activities. on positive from capital lower cash on

lease X% operating to offset Management higher ChoiceLease Page by remainder ChoiceLease operating from intersegment revenue, with X. growth in revenue the lease about from and rental revenue Turning XX% increased grew results Dedicated to due Cardinal our segment. Fleet revenue Management lower from revenue on coming vehicles X% demand. Fleet Solutions partially organic

reflecting million, in XX%, utilization a conditions percent FMS offset remain conditions typical QX. lower Fleet XX% the the revenue we fleet Power to quarter as fourth Management from ChoiceLease down operating a offset in rental prior earnings more ChoiceLease and the XX.X% did sales. performance, in in down fleet quarter of Rental power X% was reflect see weak, EBT up used were was although year-over-year, growth results partially as from the earnings QX for Rental pricing demand to market weak primarily by from than seasonal was impact on in vehicle improvement continue a solid the rental higher year. demand. rental Pretax that $XXX

target continued used of the used truck in below year proceeds trucks Used freight was teens. the fourth full sequential to line and as declines X in X% narrow proceeds XXXX, XX%. decreased decreased On but tractors tractor Page revenue quarter. operating sales a a proceeds results for cycle, are where increased with declined percent and of X%. for vehicle recently long-term our we Year-over-year the for XX% proceeds For in basis, pricing declined XX.X%, our expectations given highlights low EBT quarter.

vehicles, and line at to was Used we X,XXX decreased vehicle year-end During quarter, the vehicles inventory and versus unchanged sold with X,XXX range. targeted in inventory sequentially our used down year. prior

declined, vehicle depreciation used remain estimates value above pricing Although proceeds used purposes. residual for

tractors provides residual sales Slide used XX for the proceeds your for and appendix information. current historical estimates in value trucks and

IFS Page activity, and XX. XX% uncertainty. sales increased acquisitions, chain revenue reflecting on Chain EBT long-term Supply year higher increased quarter earnings high freight X.X% X.X% a the by for Cardinal prior segment's to customer Supply performance was partially of offset conditions in Operating omnichannel digits. target with as year, line primarily reflecting stronger XXXX, lower in operating driven by retail X%, and percent cycle driven and economic improved was Chain by Turning full gains. of productivity the and single a Supply volumes revenue the strong from

continued our percent prior Dedicated of reflecting Cardinal market in well discipline increased the Dedicated XX. reflecting business, professional EBT EPS X.X% acquisition. pricing also to XX% as for XX%, strong the from and acquisition the of revenue Page operating Dedicated a increased revenue favorable EBT Dedicated from retaining Logistics. drivers. Operating performance to was recruiting legacy Moving as benefit results year, on quarter. conditions reflecting of as

spending it reflecting I'll turn now over For high costs. call long-term capital capital acquisition the review deployment to target, the full single-digit the integration John to year, capacity. X.X%, below segment's and was

John Sensing

prior $X.X lease In XXXX activity. of capital replacement was billion, lease XX. spending activity. lower to Slide increase to reflecting XXXX, we're below $X reflecting forecasting spending billion year, Turning higher sales to

above rental remain reflecting forecasting capital lower cycle. We In year spending level planned we're to XXXX, was ending higher of fleet expect freight the the capital million spending activity. prior replacement as year-over-year, million, lower activity. replacement $XXX rental lease $XXX of reflective reflecting of planned, XXXX

be trucks to down remains Our ending The rental capital rental, pricing extended and to XXXX, we X% fleet through as rental we is continue expected average fleet X%. levels decrease versus expected have peak to manage tractors stable during In fleet as demand relatively to below trucks and shift from rental slowdown. trends. benefited our well an spending market is

of trucks XXXX, our year-end fleet. represented At rental approximately XX%

expenditures is year. approximately of Our $X.X full capital forecast XXXX billion with line prior year in

We market net conditions. Full in not as of the from expected do $X.X approximately expect in meaningful are proceeds $XXX anticipate year sale vehicles XXXX expenditures XXXX in we approximately a capital to million be billion. used recovery

XX. Page to Turning

elements In operating profile essential driving is performance between of earnings Improving creating transformed rapid turn, our contractual is to flow at of delevering is and generating target is a leverage the return Better more of our is and incremental range our profile generation This increasing strategy. addition the sheet cash significant capacity the and cash overall also our momentum given X.X business business, the of balanced of pace. in earnings higher flow. balance one the generation cash growth Xx. debt portfolio

sales on the and expect billion generate in of billion flow incremental slide, $X.X debt This from $XX X-year billion available As period, vehicle creates operating a approximately $XX.X resulting proceeds. to shown for approximately capital capacity, cash we over used deployment.

repurchases of billion the We flexible support growth CapEx billion acquisitions vehicles approximately for estimate replacement capital and about dividends, lease available the around deployment of half for strategic same we X-year estimate the be and to will $X.X and deployed will and Over to rental shareholders. capital leaving used share of for be investments. for to remaining capacity and $X.X be discretionary and available period, return growth this for

on capital to long-term and capital Our focused drive profitable are supporting and priorities return our remain shareholders. allocation growth strategy to unchanged

growth. organic in invest to is priority top Our

XX%. approximately have approximately investing since We approach billion and invested by and taken a to reducing repurchases, our have $X.X in $XXX have for balanced strategic count discretionary M&A million share share deployed XXXX

the at that, back provide to outlook. end range call discuss sheet XXX% at leverage capacity bottom With to balance our continues Robert strong allocation to remains over of priorities. fund I'll turn Our to and capital year-end of with XXXX the our target our ample

Robert Sanchez

Slide XX highlights outlook. XXXX aspects key of our

XXXX, assumptions, expecting rental market forecast growth market of a and in top growth a range muted terms earnings the improvement we're reflecting of The In our very assumes year. in continued end environment freight conditions. XXXX in later demand contractual modest

year of trends in expect reflecting slow We to patterns seasonal later seasonal in and anticipated typical the than better the rental see an recovery. freight most slightly year,

to customers We also expect average strategic and and to operational from value secular modestly utilization trends that deliver that shareholders. to fleet. the continue our expertise a our our confident continue on smaller us enable favor year will to We and improve rental remain logistics prior to increased transportation X% investments outsourcing and

X% in X increase XXXX XXXX be gains Class in the sale expected are U.S. XXXX. vehicles to a We levels. are below from of of production slight tractor assuming used

Our full the line vehicle depreciation used remain year XXXX prices purposes. and assumes with for value residual forecast used estimates in generally above

In XXXX, terms of financial cycle. for of the to operating headwinds grow revenue approximately due X% expected freight to near-term our reflective growth revenue is forecast

with below and year, range range returns positive lower inflationary from the contractual our and expected in Free earnings In as primarily to cash high each the by growth low forecast as of flow initiatives a business environment. reflecting revenue earnings and XX%, is a we at from segment's segments. prior vehicle to expect growth. cycle-tested comparable higher earnings Overall, million, XX% as solid expected market but timing. freight share of $XX is a for Slide line to highlights pricing to in deliver target, provides to growth million as reflecting cycle muted to end changes of up the XX be benefits model. per contractual growth increase operating of mid-single-digit to our CapEx revenue transformed XXXX expected operating reflective be percent the up XX% structural ROE our the EBT target, FMS well expected the earnings reflecting is strength is to is ongoing increase reflecting be the $XXX XXXX, our deliver year-over-year, FMS, segment's increased business in of to to operating of outlook increases. teens and expected between and flow. $XXX durability cash $XX

with long-term confident in ChoiceLease time EBT sales power ability when our initiatives, business used vehicle and based we the FMS expect are reach demonstrated target in in recover. on over and our We to benefits earnings market coupled rental the contractual of the our strategic conditions

DTS, growth a single-digit the in single-digit DTS to due expected network. percent economic to omnichannel sales segment's due double-digit growth EBT headwinds single-digit operating of range primarily freight high revenue in to low to target operating cycle. of our reflecting and below expected operating reflective efficiencies uncertainty. in SCS In percent segment's to synergies revenue is is is range, revenue target freight near-term to target retail EBT the sales the SCS target near-term headwinds expected return at due cycle to and strong to business. acquisition its XXXX, is as legacy incremental the reflective be expected be incremental continued high our operating performance segment's the be high of range below

and discretionary momentum activity, spending continue budgeting XXXX growth. our Overall, We continue continue businesses expect expect share by earnings to contractual zero-based to we and process. to drive repurchase we'll in our manage leveraging into the

improve. reach begin high revenue the conditions We from share as to growth XXXX dissipate end forecast. our gradually key per we to outlines earnings comparable to changes are XX Slide near-term XXXX the of freight also headwinds expect the experiencing

reflecting year SCS contribute are to in contractual previously key the $X.XX in earnings growth As modest initiative. as partially share. high from $XX. expected omnichannel benefit with made contractual are continue the improved is and offset gains. partially In Cardinal count reduced headwinds is range and increased transactional our we've of to share used share incremental brings later businesses offset by share vehicle used lower from EPS savings $X a comparable benefits than are model in deliver recovery share, expected are the earnings noted, $X.XX to earnings business. a a $XX The sales business and FMS, is our contribute businesses of be changes year-over-year higher synergies compensation costs the of A $XX parts as in and lease headwind vehicle activity. acquisition FMS of XXXX more of earnings per to is a $X.XX the incremental share, businesses the employee That earnings earnings rate and the from from DTS reflecting per per impact contractual to a end our driver increased per offsetting net earnings performance share benefit repurchase in pricing by strong cost power rental very per to comparable results. our transactional that near-term retail. the expected maintenance our Transformative in rental expected of forecast tax

from XXXX XX. key Page related to incremental supply multiyear dedicated strategic chain underway earnings and benefits to of lease, our expected growth already initiatives and contractual in The Turning driver businesses. is

good visibility have to We these initiatives.

results $XXX in rate, target new key million reflecting in to making expect relative pretax cycle. They annual in XXs XXXX portfolio represent our $XX annual a under not pricing we pricing our generate the model. run from million, component incremental benefits total in completion, will our achieving business a to to This FMS, which we expect benefits realize on dependent to benefit the initiatives structural $XXX approximately approximately Upon of million ROE cycle In and of low XXXX. our changes over initiative we're be earnings are these lease upturns. of long-term

aligning from We synergies, our realize line DTS, with expect to which in the asset and in warehouse In the to annual in continuous $XX third-party multiyear operating efficiencies we efforts, leases is the on on benefits Ryder and our sight million focused Integration maintenance expected SCS, implementation. ownership network through with In operational track expect optimizing of million announced related maintenance improvement we synergies savings efficiencies of majority initiative the and retail good the acquisition and replacing mid-XXXX. better $XX Cardinal $XX full are footprint omnichannel million with demand from benefits environment. cost to are driving to management. of

During the these see are second and productivity vertical going these this collective of as half expect $XX incremental these Approximately forward. $XXX benefits million of of of began expect to improved from to benefits XXXX, By to XXXX, we we benefits approximately actions million realize incremental initiatives. a in result XXXX.

initiatives confident that ongoing XXXX benefits portfolio contractual provide are will of We these execution our incremental strength the of in and and beyond.

to XX. Turning Slide

return to to are of also business to well positioned addition is contractual the benefit increase cycle continuing In our from focused the upturn. we on profile the ensuring businesses,

As at and call next our we peak. June, Investor expect approximately by earnings the $XXX earnings cycle in Day we benefits the million outlined prior on of pretax annual

over business and upturn. Although has cash long-term revenue cycle is of predictable segment opportunities contracts that each the the supported our flows generate from relatively by majority stable benefit meaningful the to cycle, operating

availability of cyclical have benefit recruiting We earnings from rental the recovery and costs and sales majority improved Dedicated, the vehicle headwinds but revenue benefiting FMS. and used the been in to million new $XXX of lower turnover for driver In are expect growth. sales and come

to have DTS availability chain, our opportunities point. supply in improved driver seek more freight to expect tightens a As In revenue sales to incremental earnings. and omnichannel weaker see private challenging, vertical becomes address this in retail headwind and been as fleets and volumes pain solutions we growth revenue capacity

expected cycle forecast footprint is to upturn during high We includes benefits X of benefit performance of been The down benefit our results upturn. that business expect minimal range recover services to appropriately warehouse these segments volumes cycle from the XXXX positioned the approximately supply freight for chain million. business' by as our end leveraged. are optimized comparable of confident and and $XX We've pleased our cycle the is each

$XX $X.XX earnings XX. We're $XX We're to providing XXXX. prior Page also $XX of the share quarter forecast $X.XX. comparable earnings to $X.XX to Turning share forecasting a per of year versus versus in comparable first of per

historically portfolio transformed environments. on first our lowest the As quarter quarter forecast increase our are model of focused and contractual return reflects that and our capable across seasonality. normal a range is confident We a performing been our of reminder, of profile earnings has business the initiatives business remain to our

XX. Page to Turning

achieved generated in the Ryder come. prior strong value generated to our up significantly with to cycle. phase 'XX returns delivering during have down and returns the each Since implementing strategy, XXXX is balanced the We relative extended of growth more cycles. cycle shareholders our highs 'XX downturn during higher we to and higher during

value opportunity to profitable that secular We deliver our note and and remarks. supported continue That products, committed Please our expect to shareholders. initiatives. by for later we growth our to to technologies multiyear and that ongoing significant customers prepared capabilities file We remain XX-K see expertise trends, will from today. concludes investing our momentum operational our in

lot each. of please material to a yourself one have question cover today, limit to so We

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

Operator

to [Operator Instructions] We'll Morgan Stanley. with Christyne go McGarvey first

Christyne McGarvey

But Maybe love kind expecting you Just turn maybe or pipeline a on here. versus love X%? the bit get just parts the to you on that out more you kind growth little to know moving Are there. of growth of of guidance. parts slower moving amount conversion? called a downsizing just decent I would some of guys the out just environment starting revenue muted a parse sort of

Robert Sanchez

from that's lease whole Christyne. range not on we a be well, expect said, of the freight help of side, target we a -- digits. our to within flat because mid-single as we expecting market. and Thanks, primarily lot probably Look, of expect lot FMS Yes. the growth fleet we're Not yet,

together the plan, ongoing continued freight expecting through change. create we businesses. would also could or supply our that of kind and And in softness our year. That put as headwinds the was dedicated muted guess. But chain growth best market that we're So an

we're expending from lot a not So businesses. those

just an story. As meaningful on earnings the initiative-based things and growth pretty have around really see, know continue I us initiatives growth can earnings earnings that control point though, gives the you to It's earnings to we is growth, what fact the those year-over-year that -- those primarily do we it's can and execute would really confidence we that outlining. we're

Operator

go with We'll Jeff next Partners. Instructions] [Operator to Kauffman Vertical Research

Jeffrey Kauffman

and hand, to little market you Congratulations, On a up. one about forward working focus look the tightening I people market on the freight with want roles. dynamics are new John, and on turn talking in both in FMS. Cristy your to bit going

On down, the your terminations your up, are redeployments are extensions other are your hand, early up.

as look it rental moved fourth forward doesn't little backward in if move bit. It quarter, the looked it a like

looked great. Even out product perspective, business getting looks you So the slowdown. it side the outsourced know getting Kind better? it a on demand truck pretty the lease it maintenance same? see the there? of Is your of from going way what's like Is the Is worse? I sharp

Robert Sanchez

let still anything, kind and now about I significant just -- would turn. miles think little talked it's on used you answer I'll that vehicle seeing rental is single-digit we again, color. declines seasonally, but not yet. if still we're of, upturn upturn. seeing But side, give We're And Yes. simple -- not flattish not watching a I we've moving moving big more sideways, of making a the Tom Lease the in sort closely then pricing. a been are an

you. So little don't Tom, a know more I what can if color you give

Tom Havens

Yes.

adjustments which we quarter. economic lines. I pretty generally main seen from speaking. uncertainty moved just the customer and to think There's there in customer the the seasonal X on uncertainty environment, In remain from full-service at in Pipelines is what one, been same, When about It's still has seasonality. some as decisions. just we've across that in it's quarter-to-quarter. out still lease, and concern then normal a continuing any the from seeing same look general still are around I fourth we've same uptick tariffs product you're the flattish the think you sentiment cause normal rental, the base delays saw and that

here used bouncing little to in then of and vehicle along the a to demand speaking, fall kind seasonally, And of environment like sales, the little but in And thing. always pricing as bit, rolled rolled large generally in normal with of January, we flattish QX. And expected just uptick the adjustment that bottom. a we to through forecasting we the a we year saw sequentially to of we into same does we're As most down January, in here an seasonal extent, back similarly, kind a it saw bit half.

Jeffrey Kauffman

my head little I in the That X had this of How do scratching decisions the slowing a is interpret their part you growth X% because if are So still they vehicles, bit care need part the select of portfolio me right? people would maintain the down delaying think, think to, I to quarter. paralysis?

Robert Sanchez

Yes.

go it what last ahead, about sorry, about on Tom, talk Tom you're can but I think -- spoke on Jeff spoke call, the there. about you it seeing I'm the

Tom Havens

were were We -- we large before, the revenue fleets, up the year. X% full really I've you're had what X% in fourth mentioned a fleet. in quarter, Yes. year-over-year. one, but the was X But seeing despite And we up this of unit then QX And and downsized large rest low financials, loss certainly, as very the very you impact. trailer margin. can into both impact the to and the revenue fleet QX low count from was to very see. no to that that's

there. fleet expecting to out look range grow So in that to SelectCare we've that XXXX, put mid-single-digit -- that we're and as we target

Jeffrey Kauffman

Great. Okay. That's my question.

Operator

Alliger Goldman go We'll with next Sachs. Jordan to

Jordan Alliger

sort the back there? from you the when Yes. sort to and imply revenue you know the second. just would you that your that segments. markets, for based I if be Dedicated, dedicated of chain? those expectations Supply drag in Chain could And the get can on or supply growth come because think do growth conservative? a going not freight to year? ahead of just more at out alluded which along XXXX, is the X to prove it look wanted into to And I pipeline now? just Is then help those bigger much much it lines, you has Is And visibility but what not think from

Robert Sanchez

And outsourcing say, freight solid. trends think is look, certain hurting environment secular supply then all we these impact we're are you that. long-term businesses that I most contract, markets around don't is some a of gives before What that's give more I'll extent, the But of seeing what customers to economic important Yes. in each see little a which we the color how down businesses are. the still also our as of the the is pause sign thing dedicated why the just a hurting Joe, see lease, chain. they in uncertainty starting bit

John Sensing

es, Jordan, first. just picking up on Dedicated

what earlier Dedicated from in Tom heard over as into well. fleet. You business seeing he's That lease. our about with spills

We bottom sales sideways we cycle. the of are a activity seeing here we kind the of market, seen haven't as and much navigate

chain. X months. to that think us, I for continue are supply Dedicated will both The lead X times on -- that So and about generally

start dedicated would to you kind growth in So once and up, see then chain picking starts of both up. the market contractual our picking supply

and as the one up pipeline, the actually pipelines are health we're pretty about. far As the that of excited

do with are But the year. sales tariffs particular. and policy we just close I as year, as activities the to some to look uncertainty they more as going expect see decisions we're latter of be made the at administration people we wins out part in we and sales to the think the get in movement waiting for

Jordan Alliger

in I maybe from is picking lines, the And sort just in any has vertical the sort Like shift chain interest of demand I'm supply perspective? of been. just seeing terms understand of to I are side, those pipeline, auto? where supply chain just a make most you on sure the curious up within along industrial demand

Robert Sanchez

Sure.

-- want the Sense, take me Let that? on to Steve take do you line. is

John Sensing

and nice retail said, you think health, our at in we're pipeline, will. also in quarter. Sure in seen the Jordan. XX% slightly up and up similar a look the Yes. I John business. there. Yes, Tech transactional as We've year-over-year uptick around industrial is here as

those, point. So think pretty in majority in the a I shape. at all, seeing a spread uptick I'd in say huge automotive not all of it's good But we're this across

Operator

from Daniel We'll next question with take Imbro Stephens. our

Daniel Imbro

to up revenue of on kind Maybe follow outlook. the Dedicated

down in to flattish decelerated decelerated did. the here revenue a cycle. dedicated bit a dedicated more navigate sequentially. mentioned carriers the you per think truck the quarter But I some we're It actually other than little

revenue you talk growing, and per pipeline per at macro And the stable? week we can if think within 'XX about per the it's least just looks the how truck So slowing curious is feels what about then like like is that why guide think as truck margin DTS? understanding about recovery we revenue that

Robert Sanchez

versus it around Yes. exact don't fourth the sequentially the but customer also, have. do numbers mix that market, in slowdowns seasonal has with quarter. I we And have I the mean of the really to base it's that

customized dedicated We have transportation.

are not van. dry these your typical So

to to in So revenue depending on the you're some quarter. what's going in industries, on those adjustments have going

explanation only that. of the that's mean, John, there's I else? -- know for that don't that I could So anything I if think

John Sensing

Yes.

think if would actually there was factor our prices. you're what at at revenue indicator happening and operating expect. is sequentially well I That look and to with with unit what's in But you normalizes as kind fuel looking revenue of count. is what performing at a quite line gross that looking our for we

Daniel Imbro

range? to on the as simply pricing historical And just towards lever back margin that the get us recovery biggest it. that kind of Got target

Robert Sanchez

our Yes. the integration It's acquisition. really finishing Cardinal of

have far made so really So of we've sight we line feel progress XXXX. good the good in about and

the that level back our and of story that one the as EBT revenue of to drivers a high we -- in meaningful say, So of single percent that of Dedicated XXXX, growth expect earnings would would digits. to target get our one is I

Operator

to next on Bauer go We'll Harris with Susquehanna.

Harrison Bauer

Great.

might discuss more how of kind might of by you is business Canada sort then maybe effect far? businesses in other and that that regards SCS of be some you And Mexico? Just How impacting trade and your tariff U.S. policy. business or your to have with with of so this policy? the bigger your trade kind tariffs of broadly, affected some picture indirectly cross-border And and explicit can

Robert Sanchez

the contracts. uncertainty, headwinds long-term which is just Okay. see all, to Thanks, now, want around impact who creates sign now for primarily of first right creating right Well, I customers some only we Harrison.

So contracts be X-year our for they X-year, X-, contractual businesses.

clearly that's created some uncertainty. So additional

tariffs be or the as U.S. is guess place that to may on, are it additional revenues first XX% that tell may would here, the in not further in in our relates put you I So United I thing of States, the

So we're U.S. primarily

the any the uncertainty implemented that final agreement and America have around in Mexico be would policy been Canada. with also and as North USMCA the timing tariffs operations part of lot There's a adjustments. of We

think confident do to guess we've contractually it feel historically, as resilience -- and that customers supply I well would I and leader uncertainty flexibility. do our ability need trucks in pass we to those to and pretty a to additional, certainly that. through customers, able as to transportation been I navigate positioned some help But chain we're then really both our services, relates to our thing say, one for is and And through

that. feel we about So good

just some could So it's really of U.S., the Mexico and uncertainty, I to terms things of between really be the And be. on slow creating the guess, and impact tariffs, which what hard could Canada in will down near side. if sales any, that just tell what term,

Harrison Bauer

progresses? actually maybe see And undercutting do to on pressure Dedicated. platform to what your smaller convert need rates Are get still you rate to the maybe year And of quick truckload some from a as maybe pricing to from pricing? kind you contractual follow-up of seeing shippers fleets sort on

Robert Sanchez

truckload of could during lot those little the on We're on those a color seeing of when you a margin, COVID fleet times moving Yes. companies move low, turn? some more dedicated Steve want where of is rates give some there you I'll generally, a have them spot maybe you their so on bit -- color think in But where let added wasn't what's But capacity little the are whole product give that order to do Steve, happening side. back. to during when there. moving

Steve Martin

Yes.

continue it's similar positive the starting a bounce the as I think tightening spot sign. rates, to to we where, to as far on on bottom the and is which Tom contract was see as we're rate, some saying,

those past expect cost of in customers those freight the with really back, for that to opportunities as remarks, coming secular Robert we So as coming trends said have driver tightening for growth prepared now service traded back, his in yield, market the market in Dedicated.

Robert Sanchez

that, dedicated. is guess also is our type helps I the are too, customers what I add that customized Harrison, us there majority what of would

the seeing to is There and transfer So we're on freight of to all the roll truckload. off. that's some, easy margin not as stuff that

Operator

We'll go next to Stanley. Christyne McGarvey with Morgan

Christyne McGarvey

quick a just Maybe one.

for Just is policy you sort on can what any that could frame bonus mean depreciation, of there up if Ryder? change there,

Robert Sanchez

Christyne? Yes,

Cristina Gallo-Aquino

of there what Yes, with is it out a what $XXX we're expecting, so us if there, could depends it and opportunity depreciation the deductibility But bonus looks of to combination a about an what lower by change comes on present like million. basically, and taxes it. cash interest

benefit all So cash is or and goes monitoring perspective. when on that but us closely it we're from if it's going will a and it it think to depend into retro tax effect prospective, that

Operator

turn there time, call no remarks. closing are the any like this for to At or I'd questions. additional to Robert back further

Robert Sanchez

team's think proof quarter first of expect point long year-over-year resiliency in way model. a of your of durability performance, really the and are Thank quarter with our continue this now we that as that seeing them. downturn, our another Thanks things proud We're another to trend Ryder. become business the as Okay. interest transformed the it's it's And extended I we during strong and for you earnings all.

So to all the that of forward road. we and you get looking as seeing out about excited on

Operator

participation. conference. does We today's This you conclude for thank your

Ryder System (R) 12 Feb 252024 Q4 Earnings call transcript