Old Dominion Freight Line (ODFL) 27 Jul 222022 Q2 Earnings call transcript

Company Profile

Participants

Drew Anderson	Senior Director, Product Management
Greg Gantt	President & Chief Executive Officer
Adam Satterfield	Chief Financial Officer
Jordan Alliger	Goldman Sachs
Jon Chappell	Evercore ISI
Jack Atkins	Stephens
Ravi Shanker	Morgan Stanley
Tom Wadewitz	UBS
Chris Wetherbee	Citigroup
Scott Group	Wolfe Research
Todd Fowler	KeyBanc Capital Markets
Ken Hoexter	Bank of America
Amit Mehrotra	Deutsche Bank
Bruce Chan	Stifel
Ari Rosa	Credit Suisse
Bascome Majors	Susquehanna
James Monigan	Wells Fargo

Call transcript

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day and welcome to the Old Dominion Freight Line Second Quarter 2022 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Drew Anderson. Please go ahead.

Drew Anderson

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

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

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

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

Greg Gantt

for I some profitable revenue call. second CFO. records pleased our on new to that strong to resulted me is call quarter, OD remarks, your glad will the company growth report welcome and be After we during Adam questions. the delivered which take With to in Satterfield, morning team quarter am and today second profitability. conference our brief Good the

increased increased to earnings billion, diluted $X.XX. $X.X XX.X% revenue while per share Our XX.X% to

ratio the our XXX a which ability for form many points years we these operating We ratio. market is execution have also to plan, of basis to our guided cycles. the time on many XX.X%. in business plan that has our continuing The operating strategic double quarterly our by economic long-term have execute This achieved to improved We past sub-XX% by results throughout company's us history produced the that our supported and share years. fundamentals this XX over disciplined first

on XX fair win execution positions over is additional foundation the focus market to share price. service superior relentless ability for at share a to continued that plan this confident win us our are providing market next We years. on The our

X.X%. strong. remained selecting supply it customers for today economic has began continues issues. as develop shippers the to trend to a when the with why efforts carrier day. on-time maintain ratio commitment a cargo to customers our the in quarter, our every value Our the our It improved to while quality service was during is our is many half This OD reflect important service still demand more steadfast which claims to of service appears each family of metrics service struggling second performance and and XXXX XX% that second a is with These are of even becoming employees who delivering that recovery chain

keep the products and as relationships do our we on a help part we retail running for sale. customers helping smoothly, our to their customers keep believe have As shelf while our strengthened our result, available customer manufacturing facilities

strategy in growth are our marketplace, expansion tight over we growth through this education to and expect the facilities we on We it XX% projects Our to created during we fleet, have our short-term year have target us center been of network we expansion most. the of and of the multiple longer towards within excess of the center to network, OD capacity when approximately row. new family in open and of apparent second the important, in can XX%. achieved of million amount other year. support value facilities revenue of also proactive advantage billion expect have of continued believe term June, pace amount various a customers proposition to We outlook. our to employees. becomes in expansion like why which currently to we XX% is our of technology the exceed as half with historically regardless well which shippers center couple environments, center our These our as increase is $X not unique our capacity having should year-to-date past seen the includes could have as we a has our macroeconomic investment efforts. sufficient Expanding to of well complete the that With numbers capacity in these in service new $XXX significant investment ongoing the need respect training as simply service service for This which excess for consistent capacity service more the a the We years. of our of second types time, capacity, take to revenue remain committed they without capacity

Our team changes am team past tremendous levels. on has couple I its business in the success. And shown continue in to this response significant that our of build flexibility confident will to years over

a executing capacity to LTL and profitability providing We and have the long-term superior industry, service produce growth, are believe this our we morning for we discuss now results curve, you the growth joining having value. second positioned the Adam one of fair shareholder Thank our stay ahead increasing plan, created detail. than for long-term carrier and quarter to other strongest price at by of records financial better by strategic on while greater any long-term our growth profitable will in in us

Adam Satterfield

support in growth Demand and good revenue service in and volumes XXXX, with second per day increase X.X% for LTL per tons On the our X.X%. increased when LTL Dominion's Greg our remained tons sequential of superior by per consistent day for with quarter first steady the XX.X% Thank X.X% revenue the second day improvements. which XX.X% hundredweight compared in yield Old quarter trend of quarter, during helped day. increase morning. per driven XX.X%, a basis, strong increasing revenue was shipments the the the quarter and increasing LTL per and LTL to you,

continues in exceed per and X.X% shipments an increase this an increased these comparison, For our sequential increase per rate. includes metrics increase per of XX%, in X.X% tons XX-year day of our X.X% the July, for revenue change average of growth has in day, average July point long-term to by At approximately to day. in day revenue compared XXXX, which when per an

quarter will actual our July for XX-Q. second Form provide the we details in revenue-related usual, As

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

improvement we in As of second we move of into financial drive our results. areas the have to half further XXXX, opportunity

to increases, improve We account. on necessary continue will of the obtaining customer focus yield each the to profitability

per inflation basis our to costs a We minimum. to a will control also shipment on disciplined maintain over keep cost

and in-sourced should long-term of Our for dividends XXXX which our Dominion's creating $XXX.X support Old team sized XXXX We second centers workforce operations $XXX.X same our our during advantage And respectively, million respectively, $XX those capital while repurchase million same us were win for half million the operations. cash $XXX.X of we to and anticipated quarter in the million moved million to one we seeing all periods. The and cash million start We of half us the market operation industry, throughout comes share totaled and the believe productivity our service a cash share. have $XXX.X expenditures while utilized million flow transportation million service from most first is $XXX.X trends. is of the this helping for and periods. many improved to $XXX.X and quarter we and that now closer reduce to $XX.X third-party stability we has of of also totaled back and second first appropriately linehaul factors, key our of utilization fully purchase as result, allowed believe shipment our prefer. of our for program

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

Operator

with question begin Jordan today now The Instructions] Please Alliger go will the session. from Goldman We [Operator comes ahead. first question-and-answer Sachs.

Jordan Alliger

about you if than of thoughts was talk bit – started of demand the approach And front. there contracts? the concerns Yeah. little have come sort or of some next rates your they about of volumes there price as the they had about their could if are you've environment. Hi. as some in morning. wondering, you you more probably move to as a I have things price well Good that on out core Thanks. Obviously, Can talk with about you talk discussions about shippers, this slowed and and and ex-fuel concerns balance to moderation year? growth through maybe you some

Greg Gantt

we any of Yes. cheaper anything of any much or for Jordan, such that. rates, asking as at of or pricing far haven't exception customers so all any seen kind

what from the tell disciplined. we extremely industry think can I is

history now industry. our And continue that's what over we're know more than we've our you throughout And right think be I I disciplined. the that focus. will extremely to seeing think been

good us. for I So think that's of all

far but that see very we'll positive so standpoint. from So, very,

Jordan Alliger

generally cost about Can just industry even are pass follow-up the environment? from surcharges, pretty to work quickly the the the surcharges Thanks. supposed and for maybe have talk a know on P&L on And then you a fuel up the ramped rising than mechanisms fuel fuel diesel. of impact Obviously, faster through. fuel I as

Adam Satterfield

want and neutral to for Jordan, as and come in up fuel and as But up up in the like, price the to designed, up is be quarter every customer's contracts both the that as our what to for test at look costing line revenue come stress like. they bottom to contributions period certainly goes try might down. like And environment we we look they individual looks and we current fuel what program way us. then being looks up each really down and the see same their it what come overall

sure individual try that best out come account all for that to customer can positive, so the that we do we And to might the will profitability go the customer's understanding trend. whichever into model the make costs account individual each fuel way

got has our effect a as So our disciplined of that, we our I petroleum-based why That's up, been with see cost be program. we've surcharge cost continue diesel continue there's certainly indirect lot to management increased but to and a direct offsetting of think certainly fuel, why effect with products, the on to and well. it's yield other going also having effective that's

Jordan Alliger

you. Thank

Operator

go Chappell Jon ahead. from with Evercore comes question Please ISI. next The

Jon Chappell

Thank can morning. And either of a has share loosen, and your beneficiary retail your detail capacity call would have you to only LTL Greg, up down mid-May in with consider you thought seen freight? especially some how starts really little of non-traditional business any whole fear today you. bit? let's to capacity book or much truckload retail on we've that's this it major trucking you town, since shift being that been pre-announcements the And started LTL network seen this as when market emerge? been massive kind Good capacity in there's this that your as

Greg Gantt

But that. But measure. back there's I on And Yeah. hard Jon, to business those details and specifics a better that handle address moves do. Adam's it's extremely obviously, got going to I'm let think than Adam forth. I

Adam Satterfield

a a to question, we've ship addressing beyond XX% are retailers. we've give But certainly, detail, to that announcements business I those got is at economy they're in customers we bit to out that retailers, of box little our this It's and that a many industrial just which of growth most expand last think quarter strongly and customers two quarter little certain seeing But certain on the still Jon, continuing when as bit recent came from XX% that is to the is macroeconomic of bit well. to than there. receive industrial-related more but factors been Yes, big probably got you book our out And but look XX% and customers company industrial-related growth our still nice as retail, perform we're below nevertheless, retail XX% average, those side. industrial. the continues in little just

hard continue a something was we up the to of business freed LTL when sense X.X% a about about They of for We've from be recent speak. believe improving our last worked now. service right us make and truckload we've work about this market. to overall. hard probably you We to though, of swing continue for something in overall relationships back at a It's see lot got have we years and think that hearing value shipments don't in are generally point. proposition. year, bit seeing with so to We've opportunities pieces about multiple of a that And used of we're traditionally strengthening that. spot whenever were that those existing more we'll from really and that those different months So to and were it's traditional our this be with our incredibly we're of we through that those our our network. in strength And capacity spillover-type have X% quality. on through engagement have asking worked good good customer business And that We I But us demand truckload talked at come had lot wouldn't in into That we to and our premium network. each customers freight quote that more we shipments customers. they're little the those customers that would feel environment allocating demand. We've have of things customer that the shipments so for tendering capacity going that revenue. to sure,

as are and existing a just you volumes think for that but losing not we're a be of bit so And flatter products. can customers' The some I result look little may business. demand

So the to elements of as we everything to our manage feel volumes are good continuing are currently trending and customers telling us business. try and through we about within where work our all to just manage capacity

Jon Chappell

Adam. helpful That's

economy for follow-up since has changed the to little my Just the a start bit the Obviously Greg. year. of

just have you door scale XX% shine mentioned really economy in when of market and the or the XX% back half kind to more the have helps with You already of becomes a have as have -- still back thought grow spare share? this is this about bit term murky, you to your time you and year still invest tempering longer you and of to that today Have others back all growth January. as the at ambitions out in that some to the network capacity set

Greg Gantt

sure. Jon Yeah, absolutely. for the It's latter

are when it down. better a little our opportunities slows Sometimes

you just it when like is better sometimes have it's And today. opportunities

can't it before expand your So than to I've takes, network, lengthy it is how the it difficult stop. in certain some process talked long we locations, how about certainly way others. worse how is

basis consistent we So like continue want tight to been We in to two we our efforts tight last capacity know years on grow get that quit. to to that and things share we've have years. the a when got X.X can't continue they have

Jon Chappell

Thanks Adam. Thanks Greg. Great.

Operator

Please The comes with from next Stephens. Atkins go question Jack ahead.

Jack Atkins

for you thank and my morning Good question. taking great. Okay,

to, basis? tons you would -- wait on folks. were think Could about June you until maybe Adam the what June how for tonnage be that you but that maybe I us to I patterns? we're on July July, versus any of, details know then seasonal could to per about July Q any comes number? And year-over-year trending the out is kind day for sort go going guess helpful I full a get give and So sense talk to back can commentary, commentary normal of share or maybe

Adam Satterfield

year. where flat were with Sure. per On last we basically our were tons day June,

And for May. so -- we X.X% On respect the trending June basis year-over-year a down a versus on shipments, basis, on as shipments pretty a And actually And were as were was were basis well. flat to day X.X%. we -- to it sequential with are sequential up. relates up we it per July,

about our We don't what Our point we the the compare revenue like. to. at that, give way to to you trends if as we're per in story now or average of decreases But had was we details. revenue to quarter looking can shipment. in before last quarter, lowest about of one up other. the going at sequential yield the XXXX XX the like trends component the look our hundredweight could where for see for was weight said volume there basis And take second in full point points up overall were But turn into July mix is X.X% off We will was different get about that kind some of pounds year anything right third yield XX%. freight if the And And it's quarter. things we look the third a little below were out move the we bit the what seeing our used there. yield that's to written that of changes you a overall and the so per

about So It right so in we're second quarter. trending was at pounds the in X,XXX July. or at still X,XXX

that's Certainly per shipment. start we in weight lower hundredweight. more increase of as to usually see per that So an revenue

little an a there. of have effect they'll bit So

Jack Atkins

that is X.X% correct? Okay. And ex-fuel

Adam Satterfield

Yes. Correct.

Jack Atkins

guess just But follow-up, Adam. for to you way And I wanted of that. little trends maybe clarify guess XQ bit quarter? well this operating a just I typically think a there's Okay. -- for ratio one's about then the sequentially XQ. as to is just seasonally into third to think I there I degradation my

anything ratio anymore the As talking like for puts if your thinking takes sense there? be about sequentially how we've operating be normal we though. about should get to feel and think there's following seasonal about been patterns any it would years, last doesn't two for maybe is just to But trends curious

Adam Satterfield

Sure. Yeah.

say things particular quarter. We've some to different supplies the what got So it's the And basis we We've general but standpoint from some things fourth in our quarters we is one cost quarter. and new second normally -- in year. the and that in where about in XX from third a they expenses. we've want thing what are at more this we'll increase point, marketing a see quarter some on we're than the point got third this third to second don't exciting saw the -- going necessarily the doing got

normalized trending to average That's call there's mainly the second so a a XX as about -- basis what about timing of expecting would usually -- our that to the due basis revenue costs, from kind up that programs. just X.X point. at XXX So below percent of about been take to the talked quarter to those first like have in third of points point expenses about the end normal these of miscellaneous of But quarter, XX much we increase rate. some the

been average. might what of So That's to anticipating. kind back revert that I've see

of like sure somewhere base that kind basis that. make it's a target just a for point XX.X% XXX is I to just off normalized saw that to of feel So everyone probably range us and in XXX

Jack Atkins

it. really that. color. saw Well, very I'm much the hand Absolutely, for thanks we definitely I'll over. it appreciating

Operator

from Ravi comes Please question Shanker Morgan next with ahead. Stanley. The go

Ravi Shanker

a margin business? your comment. run for that question business? you what's the off with incredible How on a Congratulations margin you off growth, that. it you if was pretty achievement. you just picture Do have incremental big That guys. top star will of have kick just Do with you related to the line Maybe the north a EBIT to target? margins run an in how do you start growth? Kind target? I'll Do run

Greg Gantt

All above. of the

Ravi Shanker

That's easy.

Adam Satterfield

broad mean, that measures I certainly at. look just No. we we've some got

we give But which And employee with and our can our about to one, it with to strategic giving our to that at and cash reinvest For that's then invest management what flow long-term service dollar an return we investments share talk market in to look the what service supports when appropriate that needs opportunities products. and look any then we really are. need have as back with think our the you that that we we starts our dictates that drives service, make. good capacity plan, good we base it. Certainly produces yield the in reinvest customers

cycle to employee will our can equation it's to better, cost to it a feel goal reason want growth. that improving quarter XX% want generate. talk got long-term -- we when that's we've why to We it. our magic on one improvement And quarter or this like just what doing make to improvement below for sake. take just to of service they feel So annual like opportunities every do work but can trying there's takes can coming of nothing as day, we and in about We It certainly well. revenue we an don't laid last company that continue profitable And to disciplined just make it of we growth's ratio margin for every whether but be that grow will out operating execution and continued we we we that the the focus continue and thinking a about the have. shows continuous year the be plan, produce happen. that at done, And fourth it out finished

continue us. record we've the opportunity So doing And good think track of a years got growth. profitable XX create should look too out tremendous that next it. We for produce got we We've there. value over shareholder we want to to when increased

Ravi Shanker

levels, obviously on inventory a their out are would red cycle And what levels in about back industrial if is what you flags distinguish your markets you like? the were to look can macro, would risk lot if that it Understood. Maybe on the be helpful. And potential what a the telling doing that inventory maybe And you be there think and it. question everyone a customers of second easy do consumer end half? between

Adam Satterfield

was feel before, what from out we like our we're if thought are will. hearing we playing really saying good I they what about customers And you exactly it's Like Yeah. would. things

slow we're for if us For freight of And certainly talked the had supported customers. the GDP, and the we effect like that that were what from couple last consumption things were telling like and customers our we we we've did and what it overall fact good continue quarters, that feel and hear remain could the customers strong. seeing to what that hearing slowing about demand demand from trends that seeing that's we were felt that we

engagement overall be. generally record And the to dealing back still all we're those pieces they've to with to over than parts fulfill orders numbers make of so, our finished orders. the last we've sure product other get other -- supply how and had of lower got need issues hearing are out months. what they've a lot got produce figure that few labor to customers with that like Many inventories and chain to them to of still And I they are mentioned fixing

help steady issues lot to sure X.X%, to supply carrier remain help demanding. and our that are that of XX% a with of this move that, But continue a to them claims selecting issues off so, of make them through certainly we we continuing be their people want one to certainly, sale, going the continue you're to to if freight there is manufacturing chain for work got on customers provide it's they've customers, volumes, for with can platform. and that to it's if time reason, steadying we taking are year. service our us it to product and something a if support we And have continue and that and as just to think be through we're And continue needs available ratio got to demand

Ravi Shanker

just very you XX% fuel margin doing Got just trying a incremental that's this. about just a volatility I timing it here back a of on But EBIT. one do does what modeling to surcharge fuel. that to Is fuel your thing? we to better from follow-up understand on just incremental neutral looking be and it. Is to you're the it I half? you're think And for with fuel And moderating overall know then, perspective, earlier -- how something nearly going last the said revenues. margins? think I'm that maybe net in kind to

Adam Satterfield

it as Well, that of I price hope fuel rate the where like look might due was you've decreases down come that we'll just think, get surcharge and I fuel, we the in for and to knows I camp that back, trying in on pay is, collect take our and of payables. side, before, the in And know at our in try that to we the as looking revenue that well. but everyone expenses contributions, the a overall environment, big tracks happen kind we're the certainly in think of the have of to that as fuel when pretty the but both to it's with they declining looking be it's get -- revenue rates. fuel And contracts saw if it's we you there the we going rate the what's we into we're impact environment lower some who back cost declining if look period XXXX-XXXX to the lower And mentioned last but fuel got in health the economy. out reality likes fuel I cost at

shipment shipment the to include both if been something you it's last got our cost cost look long-term over period, in XX moderately inflation talk basis between fuel we basis for. And on moderately so, the or higher fuel per why and And over account XX average lower and about or the points. per we've shipment. being exceed it's management yield able we that revenue an we've XXX XXX look And philosophy, when per that to years, with when our you

positive some look may quarters at long-term others, and what that's center is how can so to else different some little because create And those to our a of side service and are one customers in we've customer the inputs the continue help on in we part investing of And capacity there got we cost back relationship to in but to things continue us lot value standpoint a overall, individual like you've look in proposition, the from business, so revenue than help a how can reinvest our that got capacity and are. is, customers grow. delta that's we no

Ravi Shanker

much. Great. Thank you, so

Operator

The question ahead. go UBS. Tom from Wadewitz next with Please, comes

Tom Wadewitz

Good It's Tom Wadewitz. morning. Yes.

I can about you think, you of while. and the you need kind said and Adam, a head resource steady probably have count you talked be for

opportunity added when what a lot learn do. I of to them in they people think at of you've better system there's get short for a of time, and period kind the

the head tonnage lines quarters? cost should -- cost margin your you couple and How and So might a improve? a we margin or if buckets framework the have next backdrop stable do of different count we productivity which that think you potential to affect impact how stable about for how might to kind of

Greg Gantt

somewhere over drivers X,XXX-plus the answer say industry the needs this, of else, but -- handful range, LTL dock, inexperienced Tom, people, time, in couple the respond just requirements, and look employees, equipment to we've folks of count. to but an people that Since at it's awful not for years. it's in all Yes, we've OD, lot us that years. had to comes I'll things. to you fall awful growth an XXXX, the lot of the the last two last all and all of hired lot an those customer a tough that with But you. been everything deal across our I'm with a year-and-a-half, of in of we've kind additional all awful when of through to head that try We've experienced been entire going and And for

flatten accomplish. things to all want these would we busy think we it's don't. we to like certainly get times and to are you've slow leaner same I want bad. mean, down, when while at the you all things trying So anybody you're really not got to time its the don't and when fun accomplish But challenges, start out now, they I I say into

start do You and whatnot, processes, employees to of can your how to back to understand step and end it. they do, certainly up what refine trained with some better you

were You're of list folks to years. back the couple like the of in you last not adding

productivity, P&D are certainly, but not So of as by maybe the factor bad productivity, our whatnot, aspects stretch. line it's those load we in look and your platform gives some out all time there any of included processes there improve to And haul clerical our help can whatnot. good, of and those some bad, is It with of areas. that some kind can technology at you those what's What's things. also you well,

we've been. just there's an crazy not busy advantages like So, awful of being so lot to

to we way wants better we other this nobody be look the that can and it's when the come out from certainly. on of it while see accomplish what and at positive standpoint. Again, slow certainly, down, positive it, of but we definitely it aspect So, side

Tom Wadewitz

Okay. question a bit I guess just I is clarification. July. know of really talked the about And you a kind second

in or of about tonnage July? as little know numbers, of precise the does tonnage kind it a bit? a the that. right, But something want so the is couple flattish because imply month. number down far questions you change you've I can you bit a full into it had seen Is in to on have us backing don't around what You the implied give that flat, a

Adam Satterfield

of quarter down slightly to basis. X%, a year-over-year slightly, we're of compared second below in Similar seen as I it the what we as decreases the In bit quarter. quarter so, down July was prior the month year, our And seasonal look Typically, would trends. on -- we've a about of to say little June. at month Tom. below this It's couple quarters, always seasonality. a first decreases, normal the the well normal that when typically well, is first

little -- are We seeing at kind looking year-over-year But, we're it similar somewhat bit at versus as July to looking trend of is June year of back to least from this a standpoint well. XXXX, comparing what that that. as from are similar some a in below you perspective

quarter play how year. September the to the the Typically, rest month our So, third continues out. we'll is of of busiest see

if a we'll that in with to everyone manage seeing. we'll so, acceleration engaged we've standpoint deal and And try stay and continue to something sequential volumes make from continue look place our of with remainder volumes and this get -- some see through the cost we're we to the on to to get to just but got sure quarter, customers everything it's

Tom Wadewitz

Great. okay. Thanks, Great, guys. Thanks, Adam.

Operator

Wetherbee The next Please from Chris ahead. comes question Citigroup. with go

Chris Wetherbee

and Hey, sort a bit tonnage on commentary to thanks. guess but typical guess pace morning. than seems just too of Good understand, I is touch like sort just it I to of maybe the around I less seasonality. not to nitpicky, of be demand the performing wanted want little maybe I

tonnage of numbers? there deceleration the curious, So year you're through is more is do you there clear still what the within like about kind I optimistic disconnect like a from between and progresses. a of the relatively actually pace customers might think from that's I'm demand guess bit It what's sort coming hearing what are perspective? as volume sounds becoming But of a look them a of

Adam Satterfield

just includes XX-year the we're I demand that trends like I this doubling I too seasonality. average all customers from we have our that mind we've trying don't tonnage -- that period. the to market somewhat But and to hearing that in have that know time have had really mentioned, underperformed year our -- bifurcate mean it's versus over really address actual is share and keep our we something And seeing normal to we trends.

to So, market we have share. continued win

overall look the from growth that customers our if group think that and against. take volume group at with three have I public you tons outperforming, seen you when based on last tremendous I public feedback think us. see still you've our two the carriers the we at think that or for numbers least conversations industry, been I numbers the versus compare quarters, obviously while And that to negative the that you'll continue

demand conversation customers volumes. our And they our certainly, type not the so, service. of may the same is And demand for have around the

So, we're still picking up.

accounts. you little expensive customers. to our for the about proven we service may but may of customer product years. We're making some We've on-time how their requirements still of customer no But, -- transportation, number value that And don't We save need us, in and look whether from the help it it's just programs, for but and the more cost but is haven't proposition and the conversation total customers money. at and day, a be. when lost of same pickups They the have and defections decreased. one retailers your certainly any that just demand because to our how every the shipments give the customer full pricing the delivering can we conversations I has positive this see some strength think our of strong over important how we bit ultimately becoming place, upfront, continue be is of have those takeaway meeting to the

these positive And drive conversations continue are so we're the to that customer those having. things that

Chris Wetherbee

been and And cycles navigating successful helpful. very Appreciate many so makes those Okay. That through – that have pretty you guys have color. That’s in obviously been cycles. through sense. and

mentioned get customers fall even demand market as a your bit. is maybe this resiliency pricing the just the sort of and You in to you're little able to beginning at

we if about kind think half for of whatever how think XXXX, positive in that point in operating do sort downturn. you resiliency of model? recession kind be can Just may the ratio seeing that of for negative progresses, your in we some and or curious, you normal how volumes assuming definition, a maybe that back earnings more sort something look power a about the the maybe of from sustained we're think Is that industry? profit continue So to

Greg Gantt

that of yet, of all a We'll I where mean we're to to have I remember, last have to against this in very, things see very business, some goes. mean tremendous pretty we quarter proven we certainly we I good the think year going that. decent think. don't in I right? can But haven't where still But we're Chris, But bears level think does economic thing up that, an standpoint. control same think us at some at that it see think things that a I recession and of – still a we're out. you and I we've deterioration the we're whatnot. got and to heard I of the And pretty going don't and turn see the let's good spot. least I I from on second think economy we in in some we're Again, can't where hope today time profit a further good are goes. at spot from government a drive the the it numbers still

Chris Wetherbee

have the strength doubt about for Okay. comment. No, Thanks we that. no the helpful. Appreciate that’s the can see very numbers of it. Certainly, we

Greg Gantt

Sure.

Operator

ahead. The Group Please next Research. go Scott with from question Wolfe comes

Scott Group

just wanted I morning. follow-up Good thanks. Hey, to headcount on the question.

going comes the it's take flat So follows too. has from headcount up here had people? that to I of you just usually and you tonnage headcount if do negative or reduce tonnage periods still be gone to time at see given negative, past that to XX%. around this stays about hiring back if the where QX, opportunities more some are just potentially down look I reluctant If Do in everybody headcount, problems

Greg Gantt

to for thing. how I do extremely care try to to you're start In I to a have that. want take We we pretty the the shipment think cuts our levels where our last and cases, always making match that done hard That's do. and to many, labor. that. have attrition hate maybe revenue I perceptive years years of many kind to obviously, don't Scott. in industry of we certainly been No we've mean couple get to situation mean mean with that we've has question, some of got of to continue situation. what do to that's to I helps or question. we

now anywhere and hiring So hardly of got. we're But top not replacements than actively specific adding places. certainly of have of that, bit – obviously, stalling on hiring. that little We're most maybe we but we've always needs a kind not what much we and here thing probably we're anybody less

carefully execute you very, look would I we we So it those before would can yes, that promise we if any very make sense. reductions at makes

Scott Group

some there Okay. more hiring take attrition headcount down will we're the sort does here? could sound But it be not of bit from that of natural sort little like if a

Greg Gantt

Certainly. Absolutely.

Scott Group

Okay.

And just that that with question. tie maybe to so last

negative or a little stays still years you've you like like in XX could operating XX out something that? the improve for maintain ratio environment, So where bit, operating think in an the of tonnage as you do or ratio done

Greg Gantt

to would Well, objective certainly to obviously, and be that improve. maintain our continue would

to think of we've and this the clear. wait we'll see. want is into in not completely proven My at course point to time it time. crystal just have don't of and over crystal I that I get all ball

see people and the where service standpoint to the and and So well it just things and things the those things We'll day-to-day. that certainly it we'll drive continue execute sometimes to we'll doing see things goes, are focused top right But we'll what goes. continue the keep line. but right on where do those the from bottom line, a bottom our continue we'll have do to the to not,

Scott Group

Thank for guys. it. the Appreciate you time,

Operator

next go comes Capital The ahead. Fowler from with question Todd KeyBanc Markets. Please

Todd Fowler

Hey, great. Thanks and good morning.

at standpoint. I'm think some And had also you to the the comments, the third the your or that wage like of some Adam prepared commentary an traditionally it you guessing put from back workforce improving employee increase through And cost So about half sounds benefit from year. some you're in productivity in quarter. inflation I point getting

to the side start a So on increase moving the the curious, half cost I or expectations inflation going just to cost year, are shipment off? that I guess kind on forward. your that comments or I'm of in is inflation is that question does of back guess, basis, that accelerate my what level waging your are per

Adam Satterfield

do We at September give Yes. beginning increase each year. a of always wage the

seeing standard pretty the in why the it's the terms we in cost when half. inflation started an the this we first generally higher, and reason, we that's from of, started increasing really, quarter part is second. But year. year, point operating numbers of inflation third the our time overall about so And last ratio in And it's than in higher standpoint, expected

And turning so contracts were start and periods, our in up, over that's get we had you that at going then. to those when seeing -- really can we increases are when looked larger costs

have other So this going continue were half and certainly, NIM pieces they accelerate some this and both to we did perceive indirectly like we year, year. like to in the the moderation, follow-on directly felt in a with see of back our prices and But increase with cost fuel of that's structure. our effect sustained having cost

moderation, costs, when a operating you have. second about out, take on -- that were see this range on And up point, expect fuel, to number that includes talked accelerating we like it, kind at basis. continue see, don't -- which back I if like in X% to don't core had the But that going about. of we So to expenses either we're inflation supplies that quarter, a and think they in per this and necessarily to X% initially our at I the see from look maybe point. back XX% our just shipment you

of of mentioned, higher opportunities certainly focus And operation. we do improving so than we like thought on we -- our all to productivity but Greg be. that's And certainly have want -- it's where the some it areas would to continue

I purchase we shipment to the our of were were in second cost able reduce outsourcing There's still think help miles, transportation little quarter. the inflation. second bit in that per a that We quarter. of that that can some

back that any we save discretionary that item every on in to with pull for can look So dollars. with but where number be can X.X% line for line ultimately and it's item, of X% we statement and some more just areas, there manage each just see a decreases. the we little that may trying out we number, we're can spending range that income that that look area to on can and back otherwise, But some bit

Todd Fowler

Perfect.

guess, tricky service. of from makes think question responses, adding things lot it to four it your like Okay, now the does a focusing your I last, of it's LTL to the terminals, ability over change that competitors have to the helpful, more a doing to their any going follow as bigger forward, to and sounds about a been marketplace due standpoint, some approach a and your picture differences competitive share call just to a that up, lot let's your six that a on in market the win but you landscape, little guess more good. competitors or you quarters? of That's seen approach of customer more sense. some have the bit in like ask, I lot is

Greg Gantt

best, think continue to mean, do. the don't we'll that Todd. know I and how I we so, to do execute things

had run I our I steady continue. to up, pretty think share and we've on expect would a that

Todd Fowler

sense. curious That it’s know it over. just tricky I Yes. makes time about itself. morning. question but Thanks a was to time turn ask for the this I’ll

Operator

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

Ken Hoexter

a on Great. Good there. group morning. XX% Greg tremendous breaking and Adam, leadership congrats

showing it for kick given with the the to pressure? into how but typically pricing of truckload service I and what's the in does especially, take don't normal if maybe change see a -- negative quality starting How June given maybe downturn you Just little up group, or does cycle? you about just, the a few guess, see ratio. But bit operating I a the negative larger tonnage questions and more potential you versus pricing pricing, know your side? on that Can bleed side impacts July than long the is to on a happened trends on seasonality. few those talk had start trends

Adam Satterfield

group -- Yes. the rest where Again, I think to and last and at think going there's I have overall, or the been the that when been least of volumes flat negative you back quarters so least three at us, or at look past year. excluding

so the to has any -- that continued remain haven't has anything positive pricing heard we -- environment regard. continued is, that environment to in it's the And different and really

think generating making a management to what our in think bigger element what that big cover the an making cost we're we invested our sure business, we've is sure last expanding and I at strategies expansion inflation is when over dollars know look we're I you that our capacity the about So, XX help of the And look going network even in the to but you trying real that our strategy invest yield will $X network. years, billion us the of of piece the continue estate door the to we're XX% centers continue see we do, XX-year least our is returns, a that actually that in and are over is over at service and timeframe to industry about capacity in the down number of percent. few little a when

some overall. network. their world chains. we from ultimately, helping the comes think and that's truckload our here our we LTL, transitions at power helps of with them save money the there, our regardless, are if our It freight into customers adding customers And see supply managing side, you some e-commerce the and and this in customers' been additions network requests leveraging retail have our really So of especially

tons that's an to but growth revenue growth. slight you still So our growth decrease to continue environment revenue that that's over that it, we're XX% in average growth XX years. long-term it's work got we've look why we've for still got July our last when revenue the where producing at revenue rate includes positive but seeing, we're And above of

to what lot. good quarter's on look just that the we certainly, to the into moving a talked bottom at produce third with some that going operating improvement quarter line. we're would the there ratio, And to continue leveraging so, pretty kind still And of about the next

Ken Hoexter

Adam, just that. clarify to

industry in or about impact does last have or tonnage the more seeing a moves about industry some the talked more down or this delayed industry time quarters take quarters has I'm You really it to whatever if because the impact? couple or past seeing three different immediate see in a this the even your is normal to pricing of historically you seen start -- on? pressure if environment, on to pricing just trying a is of pricing

Adam Satterfield

softer. you look example if think during the environment pretty was back is disciplined good where with a industry period. Well, I the pricing And was that think XXXX I

be between they're expect again, as has it truckload effect pricing really we So, continue that saying we lot to network there. what the And other I And will We'll that's run But the that anything carriers. our and from company. to positive. continue an takes managed to Certainly, think difference see certainly well. heard maybe haven't be own a publicly big LTL environment. us to there's a any

many that spillover to that have heard least public think what that, on seems freight. lot the truckload carriers not I from taken LTL ones there's we've it at of a us

So, think effect truckload of this going has well that bit vacuum see as in you're have may like, little we as I back don't either. prior into loosened mode cycles freight to a spilling seen

more the me I lend like continuation in approach to to like last few disciplined other have But a that. to see I much that the continue for think So, for mentioned they're a or down watch been volumes would XXXX. with little we though we stability maybe to even quarters. itself expect We'll did the would of bit carriers seeing

Ken Hoexter

see, then to you comments on your employee kind that your a volumes overtake you expect so, to just wanted I come these at about I the on of something hiring? clarification prior And is expect hiring get guess those can talked of in? staying the levels on -- that stalling If clarify the And to now. you levels? I one we attrition questions just

Adam Satterfield

able that facility to practices our place that responsible make one give their have customers be the demand sure to that's to freight stay that are with service Well from to demand each of hiring and customers within in like They XXX our to for. respond level look then they've going know what the managers capacity the got center their to local at people something us. is engaged service right

down that as in well. So the the with hours always changes just based have let managing up we number that's It's the on people place. they something There's manage. worked volumes of them not and

got now individually numbers just in our making we growing ultimately, and then trend double-digit outbound whatever our feel facility growth. feel we service the watch continue responsibility really others, that to maybe -- But type specific volumes how strong see in we're -- of of oversight their revenue because facilities some for they've the are they've really centers reason and effort and seeing additions about level are issues got and our if handling to headcount got volume weakness basis. some customer and it's And on with good type overall obviously. But some seeing we overall our center well. service a we give other we'll that to coordinated to manage let But continue So, about that's that they're manage on as right side. they day-to-day the managers a of good that

Ken Hoexter

Wonderful. Thanks Adam, very Appreciate time. Greg. much, the

Operator

Mehrotra Bank. Deutsche Please comes question Amit next ahead. with from go The

Amit Mehrotra

the I'll three try just that one some ask to thanks. questions to other Hey, people out question asked. balance

you're talked some certain power I the Greg just think indiscipline industry. the about bringing of in of Adam pricing three lanes. and or four to kind years follow-up in ago, started attention some And kind you you call seeing that on mentioning, deteriorating

early. in of I kind a of where kind I'd part to love little we for think the cycle was to a that. start of any to the it and service bit. we're be on indisciplined seeing whatever part that like players pricing? you see could seems guys of weaker on more that. start more bud or motivation to nip comment little of large players, It you little may levels Are at on that you can a any the seeing bit national deterioration demand If that because bit be comment

Greg Gantt

No.

interaction had with of I had We Certainly an lot have customer in we've have heard we're not Like haven't we of so a this customers seen things feedback year of not from customer some that. awful all. Adam mentioned far knowledge have doing not not to that that my the coming department. that earlier, seen sales out the gotten here, standpoint, field from type at our

than I we've think all most And LTL we're industry, think at if So all healthier been that's part. our the I positive. for look you

lines improved think board. across have I bottom the the

can I into see the thought has it, surely. being whole to benefit disciplined lot that a I think think everybody putting but without of I say of price

it's So I think industry benefited general. the in

hope yes, that let's So, continues.

Amit Mehrotra

Okay. That's much. it. very Appreciate my one. Thank you

Operator

go Please Bruce next Stifel. The ahead. with comes from question Chan

Bruce Chan

Greg, of few there really RFPs inbound here. We've maybe there's that Great. out especially account a just the you Thanks those a heard signs been pricing for national I others little a that? comments time Are all from the want side. to follow-up any seeing from of in bit quick. on pickup and RFQs larger

Greg Gantt

so. renewals that. all think I I don't accounts I we national our mean, of they're have bigger annual -- heard and most whatnot. haven't

renewal Some pickup heard three-year haven't all. I everybody -- or on renewals. at may annual be huge most two that there's on But type any that's that with

this our So, wait but point and so certainly see from see, good but have we'll far to no so standpoint. at not,

Bruce Chan

the Appreciate time. Okay. Great.

Operator

The Rosa Please Suisse. next comes go Credit from with question ahead. Ari

Ari Rosa

Hey, Greg, good Adam. in morning. for me Thanks here. squeezing

certainly about one XX talked idle might So the next level, it And I of hasn't the an on froth been might And much in in network side. what in we've of the seems aren't like formula well get in you're kind of demand of that those existed have over XX anomalous that spending your there's been different down the that and kind deteriorates. so COVID, months perspective. OD share On to period industry there you seen tight very obviously, and be time, terms of or or the months thought. past it to XX demand that pretty last sustainable and and sense maybe capacity that's extended consumer like, maybe two on has durable that's as seems orders of given conditions preparing the cycle. the means past. a been has LTL disciplined about supply time, schools about pretty it's for pretty the to same you like the way At if really of longevity what sitting developed a of terms for thinking there's on goods kind invested. risk that some the look concern the a over from And guys cycle investing of capacity take through for kind that wanted for worked the how it's cycle

be just hear you hope to center of invest your a you kind perceive do I period maybe longer So for on time sitting to than the footprint, the might risk you for? on, idle expand wanted of service how capacity thoughts might you as that

Adam Satterfield

Yes.

I grow. you when well, want XX% doors have we think to excess place. center time why we're capacity quickly Certainly, at people doors times. we and can And LTL network what idle to really reason on equipment put can't place. enough. the to the most are for all as in as if it as got the the process And what in an sitting of we're inflections where having by freight it's of takes able really economy and see generally domestic is really that get to you we and the significantly rate have these in but will. growth be rest XX% us in the that's share outperforming to see in always for target market capacity that capacity service digits to takes you quick group And increased place And double demand the positive you change,

you where to have you you've if it -- to comes where investment continuing and years' to tight process got it's a consistent to and big a might things couple at are way. so knowing got in back a time be And tighter put of work in just volume you place, in

and over extra So keep and $XXX we've different. the that We we of half in recovery we're lot year. of half closer And as full utilization creates the saw first to it of we that said within this our seems we then used -- industry million excess XXXX part back capacity growth. began with that of and earlier, volume to that strategy the of through in like produced as a but growth carrying operates the Most like far it that's is opportunities network but so the of to again, the in revenue place. had XXXX certainly and through rate cost,

to $X.X another making at investments. look there of a So year, back into cycle. for takes plus of we're growth revenue some you was type years has billion prior it these pace and last those And record to and a when down billion a certainly but on us have year good go trying when $X been

XXXX-XXXX look take to operating at ratio those opportunities. as the those the cost investments But our depreciation to future where our of density all making revenue. produce manage we see all into try with you with ratio and and type to will line long-term yields takes depreciation operating of that and costs of item variable we to a a it that's only increase of well. capacity. might can is in continue that respect productivity that and are in But improvement percent to coming advantage able manage try operating takes investment well You some change it in But we margin improvement need generally said we're can the factor as get to continuous to that impact of the certainly will flat density we've costs any get again. until other the minimize flow we or on if And volume through negative ratio

Ari Rosa

it. Understood. Got

you for time. the Thank Okay.

Operator

ahead. Majors The go Please from Susquehanna. question with comes Bascome next

Bascome Majors

shareholder advantage bookend leverage been to kind to think of you as stock within feel share as we Thanks. comfortable your a the any pace flow of And -- year. bought last than can repurchase total bit consider as little you share returns little considerably full is cash price, a good far Can talk Adam that guys take go? or months have in the where the about more about bought think you in you in a prior the free six you second you've adding will historically about half? with

Adam Satterfield

the on we where the we'll as longer-term our said move on every be. the program basis. typically we options at repurchase -- the for balance got it million always And the look we've we've into to We've in past cash to was But all at continue is think certainly, the accelerated year put go at that in dividend forward. the and at cash to buy out that's of into more strategic And trending to program stock. to then to quarter, from don't Well, said put we more balance buying first we'll where look And borrow more it return CapEx want the take we're we And certainly finished element have prior know been, going that But this you periods our and and it's kind it's how the price we is when then year is directly fixed take dollars and just just day-to-day have on look certainly shares and day-to-day share well. share we we it repurchase the the year. where to got best did In program. use operations. we In at of look have of what is just think XXb-X of program. cash we through from level buy the the type at the when down as necessarily and we the to $XXX certainly try share we is beginning got to of continue to to opportunity trying starters and view use more continue last we've typically that's a quarter to repurchase the But and a program. a what just a then right, felt second a of basis. going sheet price

Bascome Majors

Great.

stock leverage price? your like is can opportunism not sounds possible stock your versus market it make So the on of that depending buy to plan view but A

Adam Satterfield

Correct.

Bascome Majors

you. Thank

Operator

next question The Monigan ahead. James comes go Fargo. Wells from Please with

James Monigan

Hey, you. guys. Thank

for on actually the the to pricing of wanted just are pressure your had wanted around spread maybe also you and given your some of might you fact of thinking pricing that just And of just high your therefore around keep Just if about competitors that discipline guys fairly the assets you sort that on pricing? follow-up get or and of cost under environment sense might touch more a outlook like the between forward of just -- the have advantage? I own cost to something cost sort amount and sort think overall. maybe moving mentioned spread on

Adam Satterfield

be we results ourselves metrics. that we can lot got the Mastio But each But rest delta horizon. and price based got here ahead need improvements, we the against be on a programs, the quality that staying pricing through of through of back lot competitors' shipment we've certainly productivity. Quality to continue we're the one point obviously to performance, sure cost know one yield capacity of improvement that quarter-by-quarter again, make look to deal side market But And always per It's changes not And I price and well, basis going the then changes. market. some ways more of, we've don't can reduce And of for of that big we revenue opportunities compare and to goes above cost like to top yield on We're certainly say the structures, continuing comment improvement a got basis to the to it industry a new our cost. we that customers to sit go the at how cycle well you've mean Again, but XXX into capacity technologies, opportunity the try obviously longer-term in feel to make for you costs us our that's per a continue And we've for in that look to we that's support shipment of to that. to we cost, time we save as element service a then to they it of trying study to but always sure to above yield. a in what get at those in it's our against it's I year our point with And as our going our both at margin kind at have easy cost basis. to think to our alignment that service premium We're how on Yes. and into markets, look we compare do be can our market. give are we asking core on long-term the pool, and a continuous closely on got we have. look believe that we price got and trailer XXX not and basis. on of it to there. that over our staying just a

it's in always to we're good lot that the a execution ahead growth. we've advantage growth sure trying of opportunities those it, opportunities and front You want that got and of curve market just we focus to our keep of name take share it's make just we and to of make on again us we sure stay profitable feel confident not

James Monigan

it. Got

much run a how up portion think given repricing on cost forward than a Just normal? that or there's do of you opportunity reprice your need to business larger moving a

Adam Satterfield

improvement continuous our of part that's cycle. again And No.

our up see metrics contracts on yield our day. as why It's go generally Our in basis improvements a sequential come from we quarter-to-quarter. business every in you

for for can account, up change. stay what for sales we're that our renewal, with It's a through comes And ways so that ask on to help looking contract It it's that's and opportunity increase improve price save to be be either. an needs a understand yield and an always money may we of a things are. the at not operational of why engaged as So, going a customer the other important to areas number customers it's an could increase. to team in their

this to have on the win-win situations for because quarter quarter. in board, for work in well. a been customers can got so not long-term customer many, we have them Our we place And the and years. we're and that We've be create here just pricing that that's team next any as for place together well, as new many want to customer coming

well that change, about new a that eliminate can through services need excitement So, again And all creating situations. win-win we've all recently for as an on pricing whether announced and to the have operational program got we've it's engagement the payment it's customers. some those some

stay those right with bottom-lines. and our going to so engaged continue the and ways do the improving right that try sales customer keep we're base and our top And are by the them things to both to

James Monigan

you. Thank

Operator

This Gantt question-and-answer for conference concludes to like would back I to session. Greg the over any closing our turn remarks.

Greg Gantt

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

Operator

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

You disconnect. now may

We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.