Old Dominion Freight Line (ODFL) 27 Apr 222022 Q1 Earnings call transcript

Company Profile

Participants

Drew Anderson	Senior Director, Product Management
Greg Gantt	President and Chief Executive Officer
Adam Satterfield	Senior Vice President, Finance, Chief Financial Officer and Assistant Secretary
Jon Chappell	Evercore ISI
Jack Atkins	Stephens Inc.
Chris Wetherbee	Citi
Scott Group	Wolfe Research
Jordan Alliger	Goldman Sachs
Todd Fowler	KeyBanc Capital Markets
Ravi Shankar	Morgan Stanley
Amit Mehrotra	Deutsche Bank
Ken Hoexter	Bank of America Merrill Lynch
Tom Wadewitz	UBS
Bascome Majors	Susquehanna International Group
Tyler Brown	Raymond James

Call transcript

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Operator

Hello and welcome to the Old Dominion Freight Line, Inc.

First Quarter 2022 Earnings Conference Call. [Operator instructions] Please note, today’s event is being recorded. I would now like to turn the conference over to Drew Anderson. Ms. ahead. go please Anderson,

Drew Anderson

beginning of morning, Litigation the The may for to Today's Old also and XXX-XXXX, for forward-looking being Good at XXXX May Act XXXX This dialing website. company's may by including webcast call first conference others, recorded (XXXX) be replay, available be contain call Dominion days code statements, Securities operating will and of regarding expected and conference you. within statements the through the of XXXX, X, XXXXXXX. welcome access meaning quarter Old is today replay the the Thank Freight Reform financial accessed for Private performance. call among XX and Dominion's Line.

that For to this are forward-looking words similar are be fact intended forward-looking of be believes, and identify purpose, the deemed may historical anticipates, any statements statements foregoing, call expressions Without to this not limiting statements. expects, the plans, made statements. during

may the in forward-looking obligation information, future results that be Commission actual The and Old operations materially morning's otherwise. You the whether no and the Exchange any Dominion's to company result discussed undertakes forward-looking and update these in of are release. new And Securities news differ statements filings forth statements. the hereby affected important in among set publicly may cautioned with others, statements factors, results a consequently, from by as events or this

before turn we we president few conference the I yourself this Please note, executive At Mr. and over ahead, Greg a in would final cooperation. to your a to like for questions time, to for limit time company's begin, you opening to returning sir. Thank at before go your officer, you Gantt. chief fairness we a the remarks, the questions today, to that queue. As ask welcome but all do just

Greg Gantt

revenue brief remarks, by another first your included early would straight Adam to expected win to glad our began in we welcome quarter some take and has our recorded year successfully to for in quarter the first market we share. we revenue XXXX. today results is and as fifth will With that questions. revenue growth. records quarter year Satterfield, our in launched momentum already the CFO. delivering on per earnings call. both that where business call continue be This the and share with After reality, morning, company conference The Good diluted me new was become XX.X% team increase double digit We the expectation significant

operating XX.X%, share. quarter to our also diluted seventh growth record in digit per first improved a company our earnings of straight ratios of We which quarter drove double

a improvements included XXX per revenue per Our our created a both and The cost operating yield weight increase generally of the yield favorable improvement improvement LTL XX.X% as growth also domestic percent in operating the a of long-term are for and drove in day. ratio, categories key to in revenue, in require increase allowed density tons freight the leverage Density and in operating revenue improve that the XX% our to both a ingredients ratio. quarter LTL and economy. our support which us

foreseeable with see superior recent elements improve future both And further and service work two XXXX. conversations to customers expect these for changing Demand remained our team. that as in not do we of our we on sales through We each based strong. our consistently has the

service feedback them. unexpected LTL the to receive result excluding lack is least number centers We balances industry. the capacity appear can of lower decrease in opportunities in seen than the with they prefer, the This public that inventory At general over for LTL industry OD. continue the would also has given group, past the which dealing Customers not to a missed regarding for of feedback within years. net revenue XX be

service continued customers’ have heard and their our and positioned increased inventories the Despite existing service integral center improvement customers continued maintain of to suppliers, shipments strength from chain from these this and supply seen network capacity customers the of with and from and our year. benefit performance has value remains are piece driving to little in This for to Old to I've capacity. similar our issues stories our are OD. demand been new Dominion unfortunately well general proposition, both has our many support growth. all an We We superior industry and challenges, we believe

We XX% year capacity. additional These of have have an plan our targets five that year. to additions part were excess facilities this new new expansion service opened and approximately currently this seven centers three to XX% XXXX

While continue We to the our first we are good and employees in during continuing support on the during quarter, work by growth. second is number to the the service our capacity expect equation. increased pieces center hiring shape, two overall anticipated employees to of quarter full other time XX.X% network of additional we our average

increases, To we the will to increase need we our this, to reliance the capacity accomplish capacity reduce would on our however, OD team like the of As of fleet. purchase transportation.

the are limit experiencing volumes. XXXX our with While of the the were delays effectively of our expected These with million and ability new anticipated plan match our equipment, to new equipment, seasonal includes expenditure receipt delays approximately capital increase equipment. for $XXX delivery in we

operate As as been transportation would equipment replaced we a use our will and and XXXX, have growth. result, purchase that to otherwise support needed to existing similar

long-term of that committed As our our part we service for ability each to to effort of market to best-in-class ensuring in deliver win share. to support remain place element capacity is customers, our

per challenges for respectively. also achieve earnings and continuing average continue share we current in compound long-term maintain diluted the our freight we our approximately opportunities on by manage on XX% This within helped of to As focus XX%, a execute has long-term rate XX to market, strategic business will plan the plan. us short-term through growth revenue year our and

rewarded in significant employees this providing And plan, invested that We a that XX regularly family believe with past significant our service for service has equipment our OD the help stay consistently and of in customers superior each resources ensure share to of providing motivated long-term at anticipated the volume As doubling investing will capacity to our included people support our support initiatives. fair have and is of growth ahead investment we market employee This consistently superior price. of our over a customers. to years. part network to growth

Adam in first in quarter growth for And Thanks greater result, confident discuss financial a profitable our As ability increase we joining will shareholder detail. our continue results and value. this produce morning. now further are to to us

Adam Satterfield

of earnings Greg billion resulted for XXX morning, to in while improved quarter of these XX.X% points operating ratio a the for you, XX.X%. XXXX our the Old good Thank factors in and increase XX.X% share company to The of $X.XX Dominion’s to record increased per a basis revenue combination diluted $X.X first quarter.

one both economy. as be of volumes balanced to growth increases revenue year the day. day of included favorable quarter supported first work extra per was This which and domestic Our XX.X% a our this yield continued by increased between in

the and market continued superior demand We available during quarter. of our as consistently win amount strong share, a network service to capacity remained significant for

LTL LTL growth increased volumes term XX% our result, tons and trend day our per revenue the XX.X%. increased revenue our in As year-over-year per to and continue a hundredweight averages. above longer

freight to this pricing LTL our increase fuel the changes revenue the reflects in While contributed increase per long-term success XX% excluding in mix of in strategy. metric, the yield hundredweight our surcharges our

account. supporting quarter while X.X% is investments consistent first for each also customer with offset as tons further to designed day revenue individual inflation, LTL the by X.X%. fourth capacity basis, strategy X.X% LTL day cost XXXX, Our per shipments decreasing per a quarter the On per increased of the sequential to focusing on profitability decreasing and of compared day in

with first and average day XX performance exceeded fuel trends. revenue without our the sequential Our year during surcharges per both quarter

Although, our market the that doubling average our It our year trends. XX remember, year trends our below of important share. volumes include is however, were to XX

despite be year-over-year XX there periods sequential solid As may may performance. a quarterly result, performance our year be below trends, where

compared first The as as during XX sequential year in in X.X% we The to follows. February as January versus in of change average were January, increased LTL a a X.X% X.X% as March. amount first and December, the day profitable of per produce tons good January February. months won the X.X% solid we with compared example, monthly and decreased X.X% are an The of an market respective share in quarter March of increase for changes increased X.X% growth February, result. a is quarter and believe increase significant increase as an

Greg. strong favorable continues and workdays that remained in demand are described our earlier environment by still be few there to revenue the reflects very While a growth April,

increased per revenue approximately XXXX. to April month-to-date Our day when has XX% by compared

April actual We revenue our Form in first for will quarter provide XX-Q. the details related

spending. first improvements cost in of quarter both operating as fuel and increase revenue the quarter percent of overhead direct the a Within was the improved and our of of our our in costs our our by and operating Our first as effectively primarily operating supplies revenue. percent The as the a both improved in cost expenses revenue diesel operating leveraging a overhead to products. revenue percent due wages and other cost a based offset in salaries, transportation. of discretionary increase as controlling increase benefit expenses improvement revenue operating percent in purchase cost supplies with growth XX.X% cost ratio and We and petroleum to direct during for primarily

for with we believe And the the higher to program the inflation of the As effectively areas. increased call, our offsetting offsetting X% half mentioned in fourth increases in inflation fuel of other to We moderate cost effectively our on management excluding expected yield year cost surcharge is to our fuel. is year expect core the quarter fuel is half. in be our X.X% first between strategy back our

We approximately service for $XXX.X productivity, Dominion’s and our our total focus of to be continue year, $XXX.X parts from capital to million network. the expand utilized our capital of million cost our million capacity increases as our cash critical equipment experience overall to to the our to share center first on to estate we includes $XXX related million. anticipate this $XXX well and expenditures in as expenditures were currently repurchase network, to share it The a while during agreement $XX.X per repurchase Old maintain million accelerated program and paid effect first $XXX the the real during minimize executed continuing our quarter. control be was We share cash repurchases costs flow quarter, will discretionary for million on the that repairs, with total includes for spending quarter. first dividends shipment. million $XX.X operations which As amount

be to rate this quarter currently rate We our quarter time. the XX.X% tax concludes XX.X% effective expect happy questions this the XXXX. we was second for for our This remarks floor and for be open first prepared Our morning. effective to annual at XXXX. Operator, XXXX will of the tax

Operator

[Operator from Instructions] the today Chappell comes Jon with first And question Evercore.

Jon Chappell

Good or your historical better than kind I you. you, XX window, everyone. quarters, in of very year you're much all you throw Thank of out pricing few last morning, environment, could start doing robust if with Adam, the just can seasonal trends the and trends.

these of moves to share anniversary, quarters, return those to vast the more making pricing As of of market last kind and long-term over to gains these momentum? trend several make some the in going favorable margin you trend you some a continue to seasonality, do or you're tonnage start envision and that big

Adam Satterfield

those that, be at variability trends fourth We've and the the we've and improvement. think with quarters, revenue more a very lot certainly the and and a those just certain the very movement I given But think can last before I the operating periods bit talked quarters couple first years ways versus in little performed average, some times the and Well, quarter are ratio the of as cost, of about trends well, trend of various well. those periods produced certainly consistent.

basis above term seen gets I points we we've of that from lot and back a our continue XX-XX what seasonal including we've of our of expect operating the achieve to to think, always revenue with achieve. pricing in over XXX and both able ratio tried generally expect, that's we growth And metrics, per the focus of per of you philosophy, XXX shipment look shipment changes improvement to would see the over quarter-to-quarter, that last our regardless inflation. long been those to fuel basis XXX to sequential points the years, we cost to talk about when to XXX

that about now, like XX% in So in revenue right got to time, certainly may revenue operating part over term in some when keep where certainly year, years management we're in that but and quarter improvement last focus philosophy. we type over with of environment is significant ratio of driving the averages a environment above be we the growing the growth, Certainly the yield longer our with to we're same good at little those certainly saw it's a that's continue that. first mentality

Jon Chappell

the the that how Got Greg. by the of was specifically have your of XQ have out some constraints you've it, so you for equipment very these the Last called maintenance thanks supplier end you equipment maybe expecting get end in get up grow looking full and kind vis-à-vis you that year? a some that. of with your some spend issues year CapEx of given the had for of number, lift to would have But unable you're with being late quarter, back Follow of and to Adam. loaded elevated you the liked to your are expense associated some to suppliers,

Greg Gantt

get we would from through sure I'm we the planned this normally than purchased equipment we mean, it's what on the whole Typically would over, pretty deliveries taking told. better. be Yes, we delivery be that especially late would That's in start were the fall. pretty year particular delivered and have build was would for get quarter it’s the calendar in lighter -- trucks, to we early the calendar, year it's And that year, this have to much later not then just, it. lot a a had was the receive going to what go. year much first I planned take we

than that's get. to getting later. later. we're a had less So the little We're little just difference. It's a hoped coming little bit And we bit getting getting it a --

Operator

question comes Atkins from Jack Stephens. next The with

Jack Atkins

Good morning, questions. morning, Thanks Great. Good taking Greg. for my Okay. Adam.

of kind kind we Adam, in So the could go place markets a normal I kind into April guess kind there freight your the I if month comment your to start going changes relative April you of trending Obviously, out, would so are because could maybe for lot moment. maybe commentary to April, back and if expectations a broadly. of taking of far, either relatively or it's seasonality. curious we're for on to of how versus March you just just

update has maybe can you of plan. kind us there. month Have versus if curious the of give an sort Just trended

Adam Satterfield

growth. see where continued strong I Yes, mean we are April, types means which has same performance, for into of XX% that and continuation to revenue of is throughout yield that continuing trends strong sure. certainly the first quarter

ability So we different of capacity these our for the positive win service, last think the is with truckload from the with effect relates a in continue as get tailwinds the demand lot LTL that it industry the we've I feedback as Much supply continue movement for of and be of customers, on it's XX And to chains, our to continue will been that biggest continues continue about as can been and many winning of the and shippers we share that and conversations, seen lack value team, over it general to talked certainly stay see LTL. LTL. center the believe on grow. LTL to have biggest think where And win we within e-commerce of of we there's within reflection years. earlier, participant and We our freight time conversations industry over believe like a we our we to we'll market have share to to share. sales

delivering We've and an else got better in that. to to service keep and So certainly, proposition respond unmatched ahead continue than that's our customers value industry. to investing that's of our our value keep anyone plan growth is

support so is be And delivering we've making to got our the focus that'll our continue customers’ sure service and growth. to best-in-class capacity

Jack Atkins

makes that And hear April. now on to Okay, great sense. that's

maybe follow guess I So question. my for up

XQ of XQ. about in think second seasonality and year, of have the kind particular, imply points way right type Just of we quarter moving going upper the operating anything as years, sort you think normal operating about ratio seen last to of seasonality of in the second of thinking first on about there the sequential kind sort keep Adam, the it, basis quarter? that think of ratio quarter, couple to this into improvement typically XXX between to to in to And do point kind mind the of Jon's to is is you and XXX would that from an over guys back XXs.

So curious maybe on you thoughts that? of can some sort just give us if

Adam Satterfield

sequential at we Sure. the target fourth. changes seasonality first had quarter that first look outperformed some from to going was, we fourth the from when our normal what or Certainly, talked you quarter what into of in the the be quarter, the and was rather we coming XQ, about

And saw XX normally were year miscellaneous supplies and we were costs are we expenses, and in Also the from X.X%. were term got are favorable They lower, some those see of really lower, some the They we about those trend, benefits that normally expenses. trend. our general increase. we're to a variance longer our an benefit

it minus. those And things, and like And reflect miscellaneous about. And spending, some talked over other favorability. plus other control expenses, way, or it's we're times you X.X% just, especially those in on could where some get usually some go other discretionary we times there's the where of

just on with pleased from So lord that. it and a put tell quarter to these would able you we'd But above with back But we're increase. a and at just our operating starts first that XX. ratios know see that focused six. be to of really have being you, some fourth can second, I I then the seasonality four we'd if to items go of say could potentially I would expect And kind look and

a So to anything that is starts good be base. with six going

Operator

And comes Wells Poliniak the next question with from Fargo. Allison

Unidentified Analyst

new that. expect in those on James terms both of in quarter and they're guys, actually, The question clarify this to you those for Alison, expense, not levels? to was previous Hi, forward, necessarily moving expense reset a just normalize

Adam Satterfield

general talking supplies the expenses? about and Are you the in expenses miscellaneous

Unidentified Analyst

Correct.

Adam Satterfield

Like I quarter. of it X.X% revenue X.X% first said, and in was the miscellaneous generally around is the at

back expect trended. historically to So to move that it's would we where

into but things trends Now, then of not the some that general we well. quarter the say But but around we increases and you couldn't that the will. miscellaneous some say again, and will a in that specific to expense, to certainly the some in going expenses, of if see continue that in there first X.X% it's lot that increase, there's repeat, if supplies normalized to be favorable saw go wouldn't what of to as that you could guidance, see to no it's more elements unexpected that's be,

Unidentified Analyst

just and capacity had equipment you the service But and deliveries. around and from XX% to wanted track tracked, of take you at XX% it, capacity the in employees, And you'd to you've call issues Do trucks service in you sort do moment you've three repairs. centers? how the terms overall, do network here? us Got with capacity think volume on to across or incremental clarify, that you your out of to encouraged actually had also some have metrics have much you

Adam Satterfield

is at takes service doors to is you look produce expectation side, to within to to always capacity our have center continue on that the the growth. process LTL. And piece freight of it that's the equation Certainly,

how to XX% terms in are can figure XX% like continue determinant more we the grow that we to much generally excess is from somewhere levels that where capacity. so to have the of and And we currently

them as CapEx expand that increasing are to and expanding to year service we so we've and through overall more we center of And proceed existing the to $XXX includes those some keep far capacity plan number are locations the year. of our centers well. got network, this about slated, three of service year dollars doors, as our facilities this million further vote So the

if is our of just pleased the in the of fourth we comes the years, where or the equation of have pull up we that pieces actually trended use we numbers Now, stepped And to we of the have the transportation the purchase to couple equation. like last one that the in other miles over people first the need to actually had outsource to year. when there the you've side seen fleet, supplement those it lever purchase we certainly the see quarter transportation, last down use that quarter versus capacity we've of we in were were increased of much in

we're So there. progress make continuing to

our increase of people continue we OD had employees. number time XX.X% As to full an in family, we the add to

attracting retaining and there to we're we're people have. continuing. to then that and continuing new our those So successful we be already business And

the capacity So of our it's of fleet. a balance

multiple get ordered, supplement you of as Greg to equipment, needed hang can deliveries in the comments, year, to prepared the there's older to we're what's later transportation do mentioned As hope if ways some we that some we relief with there. will. to we purchase been of on having in use again, will But

time So X.X% covered. XX% we've And I X.X%. between those continuing on think give to claims got ratio pieces with the and performance service we're

it's the volume year. growth we processing top despite significant growth service, So best-in-class the growth on of last of had and that significant

Operator

next question the Wetherbee Citigroup. Chris with comes And from

Chris Wetherbee

thanks, morning. Hey,

and to see starting that we quarter, of the second we comp look up some you I Adam, bit we're when per of in hundredweight starting in can a out fuel maybe of at kind next I of first, comps little maybe the about over think ex a questions happened playing So to sort maybe guess couple step yields tougher immediately hit how as revenue April. the here talk the quarters, two

of you question to I comp. as So X.X% bigger the the be sort lap of to trigger picture to of are think is beginning the to X%. already piece talked more price, about continue pricing inflation get how sort move your those about you part ability sort the from second guess XQ, just that you to would XQ of challenging environment, being we're

how maybe somewhere bit X% thinking targeting a Can about just X.X% range? little talk to So in you're called about that you X% you're sort it? presumably, of

Adam Satterfield

We in the half increases need about our pick Yes, be talked seeing of up the certainly inflation. last that the to higher, the this we year are going in started like inflation on really expectations first of middle year. just we the

half for then those what are contracts as as seeing asking current so what and the environment to per were continue seeing expect we start the starting over mature predictions the last the haul. having and going are as we get are, costs so, And And length our seen of our decreased as we year, as through last we've customers’ trends. an well we're flat making where weight what per a maturing started of we're look shipment to and on the in were with shipment increase year shipment our more. or for as some per and but in is weight We things, multiple to some as the we to acceleration certainly at volumes last well be year. of need those needs At our normalization point, but first we what of this move always in half, back weight some are those renewals

of starts type normalizing, with those pricing metrics been been of It's the and kind sequentially digits certainly kind core one that's changes overall get we're increases execute now philosophy that stronger in long-term our yield through see I starts year. if from just we're continue number this those at mix we'll that mid-single kind as to are understand you trainings, and know will plus, when But single to getting right look than down of philosophy. customers to cost would we seasonality, will, normalized think normal making they some that target of year-over-year both if digits the progress on you getting. if cost able just So look look mix of and thing, and covering increases of our in And it normalizing the can can same have forward, been you But point you numbers. to eventually continue we it higher inflation. and our at that our you increases that reported the coming consistent, just that to supporting but

Chris Wetherbee

And should basis weight Okay. helpful. you the that That's mentioned appreciate the of sort in I we as on quarter, a shipments income here think bottom I been up we likely picking up move very year-over-year that. to after be third sequentially forward? per

Adam Satterfield

I we're flat. said, now, right like Well,

year. we're the where we a of the did hundredweight, trending So of of year think what was the puts if the hold quarter, would watermark, the seeing of low Right mix somewhere X,XXX you as at that things then progress in in seeing sort have third per you we point change might steady, we're from that reported certainly some just increase. pounds, then reverse mix start little X,XXX. last start could the on second kind revenue now bit pressure through certainly, I our that's on of, will, a the quarter, last of average, we in And standpoint, third we quarter

over So between the heavier little bit X,XXX pounds, few it's a months. but and scale been X,XXX on that last

Operator

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

Scott Group

want just it can a was is wasn't, quarter for there. little was confused all around just something commentary clarify things is so tonnage I break and a help April, that you're about thanks. between couple something to you I -- And your I but XX% I sort and also normal increase XX in that just just just I Adam, seasonality morning. in down revenue confused the XX to directionally fuel of Hey, and about then hoping a underlying Good yields. anyway second

Adam Satterfield

I'll first. try clarify that Alright, to

we're never we the change about get gallon really year-over-year about in same April. down But contributions. the don't to hundredweight fuel earlier revenue the let And excluding we of referenced our fuel that March, breaking growth. give in average was into fuel, the talk is a month per will wait that X%. we same per and the want necessarily about saw up seeing the revenue March I just So we like And from that's about kind settle But in details, out. price

And averaging over about $X.XX, it's five, so a about $X.XX. little

XX% increase that of in gallon seeing type there's per same in So the that and DOE increase price about we're March, in April.

similar there. will, if we'll So have contributions, you

considerable So little looking quarter. and And the the yield revenue of will, growth the and last volume was. bit start in their quarter what about year, XX% continues strength the at growth overall and to XX% second when revenue comparison year, of look in on side. you had last We show total a was first it if the different, you

through is will the certainly progress second and the the tougher, see but growth us the of to that is little XX% but see those yield revenue why now, bit which to we well. April change certainly we're extremely a strong So solid as growth a in performance that quarter, revenue lot pleased at get for as contributions driving a volume very seeing continue like you'll right comparisons

I But first the expenses, the per could se. the guidance, operating In those of terms in ratio, supplies my we point revert specific want that the quarter. don't favorability some and back. miscellaneous was, mentioned expenses and and certainly to had give general I

in beneficial in than lower quarter percent to and One change what So from thing be salaries on a there's expected cost see was the we some other that could second certainly fringe for that cost pressure fringe wages. is quarter. year our that the had first I was normal sequential we that of the as first

to of the kind So for it thought year. back would I be expect would normalize I that where to

seasonality That's of you had they said those and number. But couldn't have from we would second, get we'll trying XX.X, if sitting put improvement to like pressure do took it if will was, something seasonal done. but from that do well. of that nevertheless, out you just time it's our throwing but very out starts ran XX.X. bit be on certainly, the but normal certainly with and target through anywhere expect think that Jerry that six, the necessarily see. we Reed a with was, XX.X Burt it normal little than how of seasonality we'd and might could specific that XQ tell items, we it. done, matter or the fourth profitable the quarter, see train strong, a very be says numbers not a be we would outperformance be there, what right comes just that a normally excited will as And couple may operating normally imply And can see the kind point what we'll to less they fourth growth of and big done in my if a but and it to there So of XX.X. if we a Reynolds We're it in producing if ratio certainly what the some saying quarter, operate took here But point

Scott Group

Okay, get yes, most of eight. the about excited an with others starting

I'm the a focus made than on is a so LTL right spot rates way different spot comment very different any You But there's impact truckload What does is spot lot how your rates your of guessing pricing LTL in -- tonnage outlook? truckload. than slowing about now. outlook, following

Adam Satterfield

make that in considered spillover worked to wanted truckload of freight the shipments that now, standpoint, might was we right the weighted taken prior lot we from Well, of year, point what's and periods be on our in last tonnage had system. out going was a and heavier those already that a

I pressures. don't either. have other don't we the same think LTL And of those do carriers many So

Just looking of some the at statistics.

LTL been freight us certainly focused freight speak carriers and I into influx something many so on not freight just and that think world might the solid we we're specifically, that transactional. be demand to, can long-term had LTL more of

prepared sales remarks about doesn't in XX team, receiving share the all the loosened of really continues linear truckload tomorrow talking landscape consistent they pay to but is our of be that we're into our We've freight And And world, are last that the not overall demand we're over truckload type going that thing XX part trends type an of not And fashion. same some from conversation so something with if market year seeing our so capacity competitive continue but, the feedback And it up hearing attention solid. a back certainly gone and parties doubled years. customers pressures numbers will from either, again, in to there's that in and that's that about Here forth. what frequently today very talking movement always of certainly we're are. come to.

a look a if we from you standpoint, revenue lot where month good and underperformed sequential quarter get something a purely on year the our have that just first average a profit that's overly underperform produced and period, XX year not And in concerned might some of we growth average to result. certainly growth volumes monthly So but trends for our volume side, the we about. as we XX saw of

takes by environment to way may So feedback take our what to come from the year. team encouraged continue and that the this of that sales want and overall it our to we we're hearing the customers do continue flows advantage volume be and to

Operator

Jordan Alliger Goldman next from Sachs. with our question And comes

Jordan Alliger

across would Yes. economic things growth, I increases these year maybe in to of they curious, next can today. headcount think pulling situation the be wage realizing and with that strong And I'm later of year, had sector. you are increases this the back? terms the or go a you other into If headcount. I and wage slower very guys Hi, given or where sort obviously negative flexible increases things do mean, you've direction, nimble into Thanks. how in

Greg Gantt

past, that fun, I we this a of ‘XX. in in at or done through flat in to in mean, fairly it managed we've lot again the make downturn a decisions in in likes you my we've least worst whatever not surely lengthy call did hard manage you It's the but recession managed done Jordan, XXXX, a times, we've through think to through it's recession ‘XX, don't year, worst well. Then we it the at the anybody have want to but or I and past. and through pretty ever, and ever probably career, it,

we've to the downturn, confidence gear we So all then world, the I've business we up down, if it a and can in back been, in and but and up, geared down, has always manage this got have is up, that. we gear in manage through

dollars. so so very we're positive outlook think building at their of feedback our to, way. point than I general, downturn. companies, the they're in are And a And are, And far though thinking not lot mention huge, two of customers in last this couple our point awful are with XX where very ever. Adam is good, the in logistics with year, accounts, particular customers. standing on is their our And these better the but of time. good standing we've will, our both about they and an accounts not by If their accounts these in They're have this very time, top strong And we we our strong, business and were in had trends is and manage As weeks. our at this we from that's today.

Operator

the from Todd Fowler KeyBanc Markets. comes with question And next Capital

Todd Fowler

morning. Hey, great, thanks, and good

standpoint. and So about is think getting think you you've of now where Do quarters. to couple are? continuing back into in headcount to you're headcount where in growth I with But about tonnage XQ. continued the from had know some above the about ask to headcount. your on comments levels release shipment headcount you caught success you add you're of year? think been the the past do point How adding the wanted half at a the headcount growth it's I in where for growth tonnage Get up

Greg Gantt

I up, over we've but than have in in still some we've places, shape probably year. we're needs been the we best I in have think Todd, we a we are, think Yes, we're, caught pretty been much closer much some

that yes, So those they dictates, add in seasonality continue and see we year current we'll how And our bit. today. certainly but are. off as then to last But about the we will just trends continue. we that happy be level in happy fewer, a have our than spot to trajectory, so. where have growth to needs If continue to a -- thing the And we're think with good a it's our with wouldn't be volume continue better on standing see little pretty will some to feel bad were that I

Todd Fowler

any shippers And be I LTL the as really are of just value your far shift in know, comments guess mix around would Greg understood, around know, base, that's good it realizing remarks, then that's you on Yes, your of proposition. service core the customer edges. I lot helpful and your I as you the I'm follow had curious a seeing to kind a there. just up of prepared comment,

or relative to your you've that that's that's that experiencing, something historically. of tonnage been industry of else capacity, growth You're of not the about a most that? you've think but when driving shift, is you where wholesale big using And Thanks. kind LTL, different because you there the do shippers available think been within

Greg Gantt

on Todd, I it's of, business. know not existing accounts. growth we not from I to at that think all, discontinued continue take Certainly, new

given chain, there a on from we've the now mentioned, have very than in probably and existing performance as shelf the product the their gain from but out chains group service supply seeing, think challenged it, them are continue that supply need important that, business customers that is us significant customers, We I'm that the the no day in their in did I Adam continued they to have past and putting reports they like ever. more sales of that we growth normal confidence folks just working so new every some

Operator

question Shankar the Morgan And Stanley. with comes next from Ravi

Ravi Shankar

the investors lot Thanks. trying why for one peers downturn figure Good you I'm your out most Couple guys answer. to morning, and to everyone. follow of aware question. And kind a years? secret sure been your sauce that of ups, isn't planning what one been has are there have of of

benchmarks accelerate kind to the sense at just continued terms elements almost irrespective turning of the get one wick going back? again, guys actually a at you'd you of are investments, you a down are to look Or, I cycle. of of wanted your what metrics on A, pulling of start the put is in would to think there I or downturn, incremental But plans. big down foot up look investments? the if and the your of is what growth some

Adam Satterfield

of and those Greg some average, bit react. Well, some we've the to I ways, to volume past, of and I we've we're earlier, XX% opportunity XX% And given capacity, excess behind in significant XX% slower in got degree past to see behind think taken like we're to periods, to at like accelerate as that that a you performance a And investments. on little the that how our range sort look the mentioned, we earlier you've mentioned little are that had. mentioned growth we XX%, being to target bit probably a at is we

and volumes you will, look our is just X out we and So and think be always XX market now. lens, might our years, if try in not term a in where to through share here the longer next we project the to

see some slow have. to Oftentimes, execute So comes downturns, a short estate can in didn't opportunities, when existing certainly way periods in opportunities opportunities. period our we've and of this we cycle in land But seen were necessarily ‘XX we thought that time. might attractive prior very we investments in it real you the center come investments service from in last like

and front go, will, looking and where you, you of about are from today. then for of to and an standpoint, our longer opportunity, be, we would to network that's we if long-term want keep advantage to they the us we metrics opportunity like area where an have sort available, that. on becomes yes capacity something to it's where to need what's be at service if continued want where something always we certainly within the roadmap to just term So But our our think of and then we take able in thinking support are growth

Ravi Shankar

plans ESG Got out in their love good trucks, both developments in the what and what pressure invest like, to going electrification there, if get an you're growing to on to investment There And up companies as and these on eye been on strengthen important follow an of kind growth path color. would long investments. a the maybe number the downturn? of We'd are seeing it. of the kind term commercialization of of looks the most kind your on a update topic what guys That's past and the autonomous with of you footprint have technologies, is obviously, you're keeping a especially just in well. from rollout the

Adam Satterfield

one, we've ESG we've is certainly just recently disclosed sustainability first Well, our report.

like We some ordered think to equipment coming And some line. the forth, our the show down our multiple was we autonomous And things, out. continuous to is forth. success to see towards a that to and continue some to over we're some to improvements and continue with it manufacturers time long-term made improvement for the the improvement. we for actually get that to equipment, of proud improvements And in continuous would operating waiting efficiencies, so multiple of delivery goals but the we've and to electric and foundation we'll vehicles, try means I were what's truck. of stay we to so to improve And So track test with and the key internally that that pillars continue but overall one of we'll relates that miles in those metrics. the still areas, have of as specifically gallons engaged of means on

makes to our sense it in of in as make so. We’ll operate things seat terms to think to term. all But all believe what that into trucks, stay or technology continue we'll we the have true have like model really how felt goes don't to to get some able give is integrate wanted place with to And limitations capabilities, where was at as from put the regard fit be engaged sense terms today, pressures and table. in LTL steal put specs the to the least as that the But that to or it and not. actually it may something may why that operating network, we the in is in electric run at of be near try of from what and they an produced that may feedback to And suppliers of exist of we that we our change, get being feedback an planned so business. a network not our see OEMs I be we and and to actually of in order some produced to the

Operator

from question Deutsche the with Amit Mehrotra And comes Bank. next

Amit Mehrotra

Appreciate thanks. great, it. Oh,

clarification, So March haven't I seasonality just give just that tonnage April you versus already? had questions. you did you in of from sequentially a give couple Could had if year-over-year Adam, April. and

Adam Satterfield

of detail extra provided what our then kind past. little the color from it No, done an gave we're where with give we we've overall in But standpoint, consistent We'll a trends XX-Q. doing. on are the and what with haven’t our yield trending just gave revenue

Amit Mehrotra

knocking bigger term a picture to of guys metrics, I right think been debating year, of is this are too and macro very the many then declined off And companies the And reflects peak don't XX% you many peak fine. has cover make that want trough stock I the stock look other midterm OD near part scenario. now movements. a Okay, of the big down what everybody's such or ball. On deal your earnings guess I as But tough in trough so robust to like to to for questions, well.

to rationally guess investments I understanding industry, if its look of tremendous the at made has structure. a the question So bit, relative a understanding and is, their cost pricing the that, those cost structure they've I little industry job done

kind the versus at any just breaks of in for is of do And Just pricing from risk those the industry of the that industry the ever you do time the is it's discipline a it's how downturn think think a perspective in because pricing there's you down? discipline than about the some specific just that So pricing that past? how in price, better talk industry been today investments? been

Adam Satterfield

disciplined. back Well, pretty a on revenue expanding And standpoint, years, get we've then the to going a offer. long lot I certainly gets estate But can network. now was be discipline certainly and about think more second look well. there XXXX. land of ago certainly no become of talk to we everyone have for that expanding lot network, I it an that lot the of couple we of there's drop rent you can And prohibitively a that think drop in. quarter were as about LTL it's and have a a particular, of I a from of I And expense the steep been thought into years back in And, knew way to that that value shown lot there's some was think one we our how where was to, lease the the of expensive, costs carrier costs, a seen rates facilities LTL of real almost carriers to bargain. but running something over have may like a a that And XXXX,

build to of about And on lately no in any the So plus pricing that our to going displayed continue truckload that think got XX% cost written industry our from to now. but that think likely those almost other plan. I that And we'll respect things publicly it's regard. certainly And that's to of LTL with numbers traded wouldn't a lot it's been what's pricing we'll over we've type see change the years. we've our the companies seen to, in discipline one escalation certainly philosophy, and continue carriers we've revenue and the in where I into expect you've change that now, have continue of cost the

That's of extrapolate I of internet. versus seeing those just it doesn't bit certainly what see is in And think don't the to everyone reports what and to can important off And going management LTL so what but, seeing you're maybe little reports sensationalized a but all that more the reading long take world. is more see necessarily to teams actually probably some you for on doing.

Operator

America. The Bank next question of with comes from Ken Hoexter

Ken Hoexter

or -- purchase think growing I quarter it fourth But scale what Hey, quarter. that bit Greg mentioned to impact growth you and meet Adam, you your maybe forward? outsourced? great, As thoughts it good needed talked way about to you quality you on the is it controls targets the now all morning, on you of transportation can first Adam, in like going sounds was a were down expense maybe versus

Adam Satterfield

that so the just ratio part X.X X.X, uptick say value and XX it XX to to something still our the our that mainly up it speaking very of sequential use we somewhat a to we that's as manner in of increase and the that tools uptick from bit good XXXX. top volume prevention we cost And X.XX claims on just party I line half carriers of little used we were miles. increasing, started keep saw minimal uptick, that overall with be to more haul and is or in using mainly our overall, But claims rate you supplement truckload when able there. within have. we've we're pace keep acceleration transportation were we're of his we in the were able we volumes significant customers. year increasing carriers certainly, operation, And areas that parties will, But to XXXX, you of to XXXX, we back growth of foot saw And round and our increasing. an customers the flattish look volume talking third operation. reflective environment the service is stepping probably from all versus through customers. the accelerations, when And And in it pretty minimal prepared response and work to that our our But a metrics to the through terms that growth at half saw Greg pretty customers and through, at into look it's now. And proposition with expectations we the our provide last earlier went And grow to certainly, standpoint. outsourced public in responding able right that able last other carriers, capacity. When least maybe you a in purchase in having year. third from our look Yes, high, back cycles, we've was prior to our those from value slight while mentioned the got if the part of comments XXXX network to was

offer, that able So but quality the able demonstrate when not else and we one we're only being value, to in can. come no capacity with service provide to

can in try in got people we And our that certainly pleased make takes as so sure of real to we regard, we're flex stay and our that for ahead And deliver a that customers. game but that investment, to the certainly to always we've investment takes best that it fleet able capacity. estate,

Ken Hoexter

one your closing of kind shrinking I I share. for that. And peers with two for right. up, doubling about or you were follow But your public maybe thanks centers guess of me of Great, start my premise, And changed, talked their guess and business. let service kind the that's off just kind of

you you of is do your I and share of see so, there. Do centers then doors, see think the still within is demand you most first, it see peers you're growth the market still a see that wouldn't changed impact, new and growing questions you goes Where just Sure the now So the lot days, adding relatively targets when within you because you see if in kind that a of these on structurally taking? now not dynamic stage within roll that where LTL of is service trucking market? set so it it are the the market? market coming set has out the you what And do entire growing right? to see consumer? Do for dynamic ecommerce everybody's a LTL maybe

Adam Satterfield

talked for we've forecast both. out, manage have volumes we before, above for about scenarios the baseline have this a scenarios try plan below and we And to where that our growth baseline to baseline and in way and Well, we then year. with try in that we have always but a are project the business, the

all And have there us is and this in we favorable XX of our year. certainly and in with of you largest the of And are what the customers. center and to and then oftentimes, that give if the decisions of of with that managers we've generally some from additions making, we're going a our on are and the and scenario are have back at running what's We our terms environment can and we've look and they're got a do below point our many service on how things, with make is control or customers And customer numbers and as party on. their managing going a in either been execute logistics, conversations on forward. part had scenarios baseline continuous adding our has is each lot plan shifts of terms operation we structure continuously pulling where volumes that years read three it depending side have to baseline that but top headcount communication expectations their above way overall mode that fair like PLs, just and of of to and And between other constant operational needed base. there's that our amount of network get is just we feedback for of communication still takes from third and them our customers, they respect business we six

kind that different be some might why our what with and thinking so this goes of our might and baseline about, bit little talking to a respect into year. overall of conversation than others transportation maybe seem And

Ken Hoexter

market? the side? still understand up, Great, share trucking wrap in thought structurally the – it it just and to the Just you yes. taking would, within within see your LTL Do that thought like

Adam Satterfield

sure. fulfillment right the that both for our see you we're all of leveraging was to quarter balanced spending. irrespective We're growth, those and that, we've effect it industrial on continuing freight got revenue are will chains LTL seeing and pretty now all supply e-commerce But this demand retail carriers industrial I shippers we related first are consumer grow. that And business. to for truckload that if between feel do. distribution there's it our And truckload our those as basically, good continue to look growth our different a numbers, like And the when center. Yes, can at favorable, in freight, with one in they're center, throughout of our region. the manufacturer, goods moving XX network same be that that manufacturer, full network to we it's build one distribute fulfillment system of full we've is one ultimate and built out freight, in now we same centers regional moving van that may goods that that in leveraging but goods may been have yesteryear, a

for from the so given volumes LTL too think that continue will the the full customers. sure we I on to we've and customers a type That's we by the product must change no requirements their how focus made, that by industry. of And will on making And And trend share the then market XX a time box scorecards their And continue like won think with forward. of shipping type do. show that big And into value the that investments add have that we And date, think drive old metrics damages. certainly, to over best retailers further vendor been can piece you've in that vendors, of we time their or in it's arrive most programs. on going well the and the they that got last that's we've our years. deliveries

Operator

Tom from Wadewitz the UBS. next question with And comes

Tom Wadewitz

Tom. Yes, it's

I weakness Sorry, guess and key a point bit what, follow that on a there. little goods was of of concern. of like seems spending potential the kind up mute on I consumer last one

it today, your you that's level other mix XXXX think be sometimes has we towards and it's And book, high more amount to if maybe cycle, if your industrial of skewed amount XXXX. a when buckets. like Or look at consumer lot or to that do But put consumer? weakness, of want the if had and I consumer, in well, is broad what want to you So you how include overly you about mix of it do a in we industrial, say, and saw hard y precise. x know then brush? kind

Adam Satterfield

threshold. we industrial industrial have for and mean, And that good our still mentioned of to it's and lot related -- probably closer share it's a moved seen with where still than to our weighted to a seeing continue the the that's but with been XX% I industrial as I customers. that retail growth revenue good more market is periods -- are XX% faster. XX% And retail XX% well. spectrum, was there both related, is that's been growing we've a retail to up story. us. mean, about bit our But to good have retail, But share that in we And growth And XX% I see we're growing our of part big customers of there.

has a keep pace. as well industrial bit, grown little continue retail So somewhat to good it's has crept but businesses that component up our has

Tom Wadewitz

the commented I related clear from consumer this, customers more industrial you have customer aggressive? too hearing, industrial or hearing type for light. that you I guess, segments if if customers is those two but are difference still were difference outlook on is Greg, know thought this consumer. the a don't And urgency side in I the input versus you the know, Are if of, between inventories kind I and on a don't more cautious inventories think, of there's in you you

Adam Satterfield

conversation customers, We be, it retail from feedback and purchase, that be getting if an where many simply inventory missed dealing are we're had look be on it's shelf side that industrial to with, the ready product really now sales online the orders prefer with inventory or have number continues the awful they of the and they of them than low or that that ratio, some are the haven't opportunities in what reconciles lot at to lower about will. we and to cases, back if an on you balances

so earlier, seeing only from we and well. side supplier feeling and the from our think not but customer were something that's And we're I Greg seeing mentioned side, hearing that that as it

also customers. And are our kind of many both So hand suppliers go of in hand.

just the we back need continue I than type term you are inventory believe high we feel that's sales freight we that that consumption confidence past to seeing of be has the to board, we're a even household still slowdown, that be ratio to continue were see consumer higher long we balance demand think that where pandemic. not given can inventory like fact it think, spending sheets perhaps will consumer to And if up. for now, like pre we been. why right will. strong, good. as So built I maybe we continues any balances feel And But is mean, But as across

Operator

Majors Bascome question next from Susquehanna. comes form the And

Bascome Majors

there question, to invest sorry, able the where a scenarios, peers? in been five buy year structural you've where last maybe think year, where Is looking, take you're years. a is clear over Is taking scenario. What consistent way long of build actually you've to to that it XX hypothetical invest, making a Yes, and have it Thank to the I'm dead the you've you into But that more where the you approach a in what able kind the and in recession capacity? seeing change situation thanks for a to investment single curious, historically? plan, term. with of another don't the that in, think less a to to strategy? at sheer would discipline what just change horse to run your market just I'm to to gotten land, of price XX see it tremendous would analysis pricing sub in been you. it's my make that the tonnage about gain seasonal not But amount I'm you not about you to to invest return scenario talked but beat you as change curious versus

Tom Wadewitz

of you if markets it's I may some go if, saw sudden, if the to that very Adam to And and again a mentioned us major opportunity difficult them to of excessive the capacity, downturn, all as know truth difficult present an something we we are desperately we a to get But that kind, for downturn Bascome, us look out But for do very, if sometimes in earlier, a maybe extremely we it done. that do and and give place opportunity big in a hypothetical. best a had different. you provides would tell that things certain and some need.

facility about if certain it five you to really of difficult two, how I've much in talk things And this. optimistic. remiss or flip back shouldn't three too difficult build whatnot. country, us. I it the a hypotheticals. and but land it's that's one that But of if do how to months, to parts terribly something in and about can accomplished. is of certainly take We've a these past, we and thing, and the six be in some be the if to hate got market said we'd think four we sat I to when get get is talked acquire we'll for So advantage years some in And we opportunities down switch the and old and it building slowed provides markets, started year, know now it even

you've got to got to there, when You've opportunistic be strike are those opportunities advantage got them. you've to and of take

our So and drastically at would I'm we've change our a fair not had strategy outlook sure that this point, amount think success. anything I of

XX% it's to a still position don't agree crazy, that, And what to if XX% see put you'd I share. at we've take were And continued something market we changing, at with but honestly, that a that worked. think in share. done we're I ourselves good we've share

think a critical think opportunity it's And, take standpoint. there's when lot again, we that advantage, for So of our upside that from still I growth we provides.

Adam Satterfield

if to you've been continue that be to we're had had little participate so times in that we made advantage these XXXX, market in seen think to the take opportunities have enjoy able we that's But reinforce the on really saw to to kind more we have the growth have a those able the to to able and bit today, been not decision environments. strong wouldn't more add back in on certainly, Just to than year a wouldn't our different revenue CapEx it execute color what last market of point, invest And same XXXX. to little had that and I And plan, why the the capacity to that If that us participate then a slower ‘XX. that had we the swing excess of pulled upside, not in able listened performance, takes everything to strategy. investment point, and we is buildup true ‘XX, it's had been and we seeing at read we during different so anyone. we've

growth And continuous something make really cycle, focus in of that we've we've maintain are slower. we're a investment that feel us. continue of got expand on we we're runway sure That's just long or And market, the overall. it's going for ahead so to the and middle to things if as like take Greg whether got said, network the to upturn our continuing just to

Operator

And Brown James. the next question comes with from Raymond Tyler

Tyler Brown

Obviously, zoning footage we've talked so are broader capping is good actually the developers morning, some guys. square environment, real industrial and year? able CapEx Hey, Greg, how are it that estate. But you kind real $XXX of Hey, it, difficult market. in million talked sounds some estate like to growth confident you materials labor will be earmark in about spend you you on this that actually but to

Greg Gantt

to be I'll and just have in am an concerned, with Well, honest exceed we've more I play. Tyler, that number. to going awful you, we'll a have see, we're lot projects But maybe opportunities gotten of little

So doggone I align we'll present nowadays to see just the you budget we that price themselves. tell can And at quick. can have reach pretty opportunities what that

think a we'll it's think Honestly, all there. I challenge, I be over. So but get we'll

Tyler Brown

door just cost versus you like kind actually for mean, really it's directionally question. increases? would that I is be But helpful? of that plays Just one. costs into to so think with much my pre how is second difficult say increased Okay, important a much all is a question build how anything the a I But like material would today the COVID?

Greg Gantt

concrete, materials some the the range, probably of or our but Everything did I'm real see and or in pandemic. materials. be significant. all than some talking just year about recently, Yes, increased significant definitely relatively the less it's properties there. up estate last cost something that since two I XX% materials has from give is now. I'm folks the everything, it's are about not steel, more , it any relatively talking than take, and

Tyler Brown

Adam, And clarification. that's then, helpful. question, Okay, quick just very

credits was your is that forklifts propane those go the drag CNG consume or a non that and year-over-year does that for QX away credits? material? if So large And in so, didn't qualify tax

Adam Satterfield

that go to not. come different gone. did and that. credit at if [Multiple it's credit very We'll gone asking comes or perceptive You're But like think see that back sort I Speakers] that point, this has times. away. something at But of

Operator

comes And the from question Chan Bruce with next Stifel.

Unidentified Analyst

seeing lockdowns This Good and this customer Greg, Thank you. squeezing respect to morning, on we is guys. Thank patterns for summer, change get And congestion, in to are and given increased this. order here. quarter. Bruce. congrats for on maybe guys some or CBA in negotiations, their front you China's some later you potential in With if were ordering port Matt for curious the in perhaps of contract us any COVID

Greg Gantt

it this the over not Yes, well Beijing Bruce, the lockdown not Thank would not cities what this I folks as heard impact. comments. -- the can't if from But definitely we're issue like it's comment I that be they sales have And I point. long they will continues. have port to we're if our of good. as on to I And session. you. I for an or expect our as there not hearing yes, that. heard question-and-answer as and any return already. to closing Greg customers conclude have does that. be But floor that from that the It's rest going to -- an Gantt

Greg Gantt

if Well, a and call give Thanks. thank you us all anything for I appreciate questions your further. hope participation to a today. your great you feel We free you'd day. have have And

Operator

presentation. The you Thank you. concluded. Thank has for today's attending conference

You disconnect lines. may now your

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