Old Dominion Freight Line (ODFL) 26 Jul 232023 Q2 Earnings call transcript

Company Profile

Participants

Drew Andersen	IR
Kevin Freeman	President & CEO
Adam Satterfield	EVP, Finance, CFO & Assistant Secretary
Jordan Alliger	Goldman Sachs Group
James Monigan	Wells Fargo Securities
Jack Atkins	Stephens Inc.
Jonathan Chappell	Evercore ISI
Thomas Wadewitz	UBS
Stephanie Moore	Jefferies
Kenneth Hoexter	Bank of America Merrill Lynch
Amit Mehrotra	Deutsche Bank
Ravi Shanker	Morgan Stanley
Bruce Chan	Stifel, Nicolaus & Company
Bascome Majors	Susquehanna Financial Group
Scott Group	Wolfe Research
Christopher Kuhn	The Benchmark Company
Christian Wetherbee	Citigroup
Jason Seidl	TD Cowen

Call transcript

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Operator

Hello, and welcome to the Old Dominion Freight Line Second Quarter 2023 Earnings Conference Call. [Operator Instructions]. Please note, today's event is being recorded. I'd now like to turn the conference over to your host today, Drew Andersen. Please go ahead.

Drew Andersen

to Freight Quarter Line. welcome for Conference and Dominion Old morning, the XXXX Second Call Good X, X Today's be beginning August available is for by call being replay today recorded and XXXXXXX. access code XXX-XXX-XXXX, and will XXXX, dialing through webcast The accessed for company's also XX replay may be at days of the the website.

operating Reform contain Old including XXXX, statements, others, regarding may forward-looking meaning call of within conference the the Act of expected performance. financial and Dominion's This statements Private Securities Litigation among

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

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

ask your limit queue. As Thank questions all to before before the to X for time we returning to we we question do you a cooperation. just final you begin, in yourself today, note, welcome fairness but that at your a

Freeman. to would ahead, the Chief go the I At over remarks, Officer, President like turn Executive Please this for Marty time, opening sir. and company's conference Mr. to

Kevin Freeman

the team on is results glad operating economy second delivered volumes. Satterfield, we domestic OD considering in and the the our some will with take for The to the second be today our welcome brief the continued decrease conference a our financial Adam softness after questions. in quarter your With challenges and associated morning, quarter, solid me remarks, call. Good CFO. to And call

was in costs focused our revenue our managing during on improving the controlling XX.X% yield, team our variable quarter, our and a decrease With spending. discretionary

XX.X% per $X.XX. to pleased As a earnings a we share were of produce ratio operating and result, diluted

execute plan to We achieved these The on ratio fair during many which results strategic is our cycles. plans a years continuing on-time guided superior and for many price, centered claims throughout by service economic X.X% cargo at service ability has of us included second that deliver our which performance of quarter. a XX% long-term to

Providing initiatives. this supports superior proposition level customers. of relationships Delivering and also superior with value service our management yield ongoing strengthens our service both our our

revenue ongoing offering center our improved quality and in to over our by inflation support We designed approach long investments a is have term of and capacity service offset the consistent which our pricing, cost to technology.

to ability additional which our of that market initiatives. consistently value our share an that believe proposition we others differentiates our from is offer us the industry, in network support believe We capacity will element long-term our

becomes reduced both yield, productivity for and our during environment. density. long-term of share market improve, providing a subdued. density. much, as our our service to less improvement however, an operating density generally quarter consistent remained periods require in relatively overall both customers, our first With year-over-year in Our volumes, The consistent a loss second decrease our commitment favorable resulted our the We believe macroeconomic superior demand it requires was the environment despite in operating ratio in maintain freight challenge of our with where increases that which priority to during a

percent direct well per second X.X% of improvements however, manage team us were linehaul maintain These quarter. by during helped As hour and latent efforts load revenue. as pleased, operating shipments per We the to our X.X%. increased cost evidence that this X.X% decreased cost platform of other shipments as a our factor our fact, hour our as increased P&D

on costs, of fixed. other these percent hand, the categories cost as quarter, during are as most increased overhead revenue Our of the a

in expense an the We aggregate execution ongoing depreciation increase due also expenditure of to believe plan. our capital

We plan of XX% outlook. have service economic is range execute excess short-term this believe capacity within regardless critically to We a higher currently important than on the network, continue it XX%. to our of little our center target which approximately is

can are building in the time. over land take with amount to to we service make every Therefore, the right We curve capacity effort confident centers these Finding stay ability market ahead investments. as remain in comfortable term. with our and share of we excess long the our win locations of growth considerable

share capacity as market our our doubled without for regular in training, our as investments our years our XX We and fleet, consistent OD not technology investment could benefits our employees. well of over the family education past center have and service in

approach becomes but inflection us is has We occur, positioned are in believe to an apparent proactive managing happens. when elements acceleration of to respond demand the any for environment the which a in typically not most Our well point created shippers advantage marketplace, all capacity in in tight when it going we environments. strategic to do we to capacity always volumes know to

LTL to increasing fair of strategic to better Through a to than we providing believe we support our for industry. price We positioned plan, execution our records team profitable the value. strongest has long-term long-term are growth profitability shareholder the and carrier the and of other any in superior remain long-term created capacity disciplined growth one the at growth, committed produce necessary maintaining service and while

and joining for discuss in Adam second results Thank you this us now detail. financial quarter will morning, our greater

Adam Satterfield

decrease results quarter revenue per morning. good hundredweight. per you, in day XX.X% X.X% tons LTL second in Old the and for Thank LTL revenue a reflect decrease Marty, Dominion's and

diesel per the surcharges, fuel by consistent decrease in the our quarter LTL affected during fuel of reflecting managing were price metrics significant X.X% yield increased approach excluding Our yield. revenue to the as hundredweight,

decreasing per X.X% to decreasing day basis, per and decreased quarter the second day On first when LTL shipments the day a with XXXX, per LTL sequential for tons X.X% quarter revenue X.X%. compared

for shipments per average day, day. these comparison, per of increase X.X% tons For XX-year an in X.X% per increase an revenue in and increase includes change metrics day of an in X.X% of the sequential

average have Our have been remain of We sequential our shipments that to had in achieved through despite volumes we day year. previously per growth consistent since the communicated period. the last December consistent second expectation relatively for historically on quarter this

Our few baseline thinking past remain quarter through the was third although noticed consistent as have over in for revenue incremental volumes we to increase the well, workdays. an

basis change with revenue in week-by-week so has July averages. consistent been on in historical The far relatively our a

closely XX-year per average it first we're the will July sequential with that As sequential in day appears time result, aligned both our for change. and year be where shipments more revenue a change this

a XXXX, days still July, X by the approximately that end are over we've past we July there the the of has the when remaining through few steady XX% workdays month, this While to seen July hold expect decreased day trend our has few compared skewed number If timing although to work the the holiday in revenue slightly. per XX% of

revenue costs. employees that of and points. changes improved are of drivers, and transportation included our increase [Technical XX direct percent more wages and as cost Difficulty] price than purchase These basis our benefits fleet a our fuel diesel technicians the platform for in in offset salaries,

$XXX.X million our first repurchase and second for Dominion's cash respectively, the $XX.X quarter during We period. million for quarter half same and $XX.X million flow XXXX, million cash utilized share dividends million and for of $XXX.X million Old respectively, cash XXXX, and of operations periods. from those while half $XXX.X program $XXX.X while million of totaled first the were $XXX.X second totaled capital same for and million $XXX.X expenditures and the

approved program a billion the that $X billion We of program announced provides completion begin authorization after has this program up to new This stock. our Board repurchase of outstanding share existing our with will XXXX. July $X morning announced that in the us was our repurchase that repurchase to

excess focus capital profitable capital intend priority of strategic we our to our long-term investments business. expenditures will to the capital first to spending that our continue for support While the growth shareholders, our be returning continue in of

our and to effective and the XX.X% We Our quarter of the annual rate XX.X% XXXX rate tax effective for tax third of respectively. be was currently XXXX, XX.X% XXXX. expect quarter second for

Operator, this questions floor This we're concludes happy for prepared to at remarks this morning. our time. open the

Operator

first Alliger Sachs. Goldman And with [Operator the Jordan Instructions]. from comes question

Jordan Alliger

lot the out you Obviously, what, from of a if you're anything, with or the a Can major from touch guess diversion now noise a there. competitors one background seeing bit either now? diversion on there's expecting of little in maybe I perspective -- a

Adam Satterfield

that. you think But to Yes, days, specifically we weeks, like I maybe started bit really, the on carrier Sure. any over it little goes in an to have beyond past to few another. business But or seeing a start better we uptick that mentioned, have I in few seen back if past want don't particular. will, and we trend, over the X make comments

I cycle. at a long, end the think we're of slow

the comments start get to hearing last Old shippers issues the carriers over start last reusing And kind with of about we've supply And cycle, years guess April back stayed the for service to typically, their as things this of X we going I chain. need customers other have we been front when really slower, end Dominion of year. year, and in of our to within X.X

over market things, measured doubled in the types want for the so last we and share and winning those business conversations But right growth over we to years manage last and we for we've our long at term here when years some few period started and long we over to market the intensified that of our weeks. has way XX a the over when success runway the next the I got try continue think way at And opportunity, having share look our to of think increasingly that keep of we've us. of about years certainly, XX we is the ahead we look

to about supply to customers can front we and value So Dominion the stay how we'll for and deliver Old value talk continue in chain. their sure proposition of

had waste call So that a to of month last the of quarter. of increase. driven bit running an closer days, little month. incremental end We XX,XXX has about But on we've a to see at running in few earnings been, a And the increase the lot the day. beginning last a a last about shipments day. from we it shipments been talked XX,XXX We little typically

bit forecast higher been higher, had little what one hard It's driving a than I it to initially factor versus has month probably another say ago. that a what's but

things up takes -- like like demand into we out towards starting in early expect but this and more year supply a But XXXX, X,XXX, to start cycle per end little all the with return levels been and it would and the having of slow feels expect end long. us at underlying to initially it that to get it's we've it conversations start seeing like we of to X,XXX, X,XXX to the we're starting the demand So But would equation, I what feels just for. the of so we're yes, turn had the as certainly, little good the forecasting part customers getting maybe than a business feels certainly point a shipments day, feel picked at having is are industry like of improve bit. bit like been year we

Jordan Alliger

a I just XX% mentioned If capacity be demand problems. you whether you ask follow-up? excess I now, have network about or in had competitor it think your could

it excess like I -- XX% that push mean be would capacity said you relatively capacity would with or XX%, at about you you excess you think would run I you XX% is firm normally, line? lower? also or a just but

Adam Satterfield

sequential that increase, due back you -- second X below where were look quarter. target. only a we system, a the look carriers the first with that X sequential quarter carriers public good the to year the Yes. sequential on third example periods the had from another second we we that our at look a that average, go you XXXX trend, Certainly, and economy. and from when XXXX followed were to increase through increase the carrier at where, least growth double-digit we or is to then up been at the we that. the of significant strength is And it's had XX% just And that

But and in ahead proven years as strategies certainly, that you've the several we still -- that center capacity the growth to think term to of our be try -- it can in try further increases But we past element piece ahead try the we equipment got we've of case, And for service of centers. curve people because system. So significant build is stay into that to the capacity and service in capacity if ahead you've the of take long thinking the the of way and one always equation. the with well. the curve. component on that got plan business right stay overall pretty business and There's our the we to

we different. generally We've system centers ahead, from number that always that to certain about will. -- that's just others flexes In capacity and each a if try down markets, center is where and stay to up further you stay that's got more even got an try some but overall service than we service But average. and

Operator

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

James Monigan

James for Monigan on Allison.

latent maybe Just about third And seasonality leverage? think as some should improvement? think sort above quarter? we getting wanted we operating well, volume, of you're OR how potential should the sort pricing should the the better essentially we of to given trends, something about ask of how see even Like in about presumably sort

Adam Satterfield

to Well, top we've with I line, when bit comes to here. give factor we the little And to line be going shared think continue we'll obviously, about are our determining July, is the and the update. it mid-quarter where a top

will August well. there be So out as

standpoint, quarter. past. point Typically, second this ratio a in But slightly usually from the different see have third the about basis what and the was I a what the may operating than we to thinking we a try in from baseline to address manner XX increase in I

going would feel the overhead I from where some be to we going third are have And an of wise were. total our expenses than this the categories. quarter overhead -- in aggregate standpoint I of are to are we our some dollar going dollars to in some like higher increase expect --

Some will of depreciation. that be

to supplies our in expect miscellanies our higher and expenses We be bit a as general expenses well.

on top where in. will it comes that depend line So

a think manage more I are -- variable as manage revenue. can percent nature we continue consistent in of costs, our to operating which that direct

constant would costs were look to we second where but try quarter. slight with the in so last were consistent with those a year. improvement, keep that And fairly be we And to we would where

And then on we get it that just becomes leverage the overhead. the

end terms higher, was, little XX top baseline But we than now, increase a we where case if that the the be I we overhead what thinking the normal bit some going and lose just stay we've further of environment was because thinking like XXX what an quarter. dollars you the scenario to increase line, growth were really from slide, that's our to then I if between did if there. incremental somewhere more we got will, if in we in of would in the obviously, improvement might think are base expenses, basis So points the the OR second up to would volume if of get flatter some previously where worse over that be seasonality, slightly leverage

is lot move those of as a depend doing. the to top how revenue So line just percent a on around going dependent overhead what on really is costs

Operator

Atkins Stephens. Jack comes question with next from the And

Jack Atkins

ask X Just Great. confidence you the more seemed any you would be on to environment. specifically, the seen marketplace. you pricing there weeks the if months And question more that whether months Have incremental was the commentary -- it's there, guess, was around in that, some the sort there would go of some over course I on marketplace? it change freight or Okay. the I like I trajectory give back pricing like the anything recent in about think, guess of transactional a ago, in last of helpful. few competition of I'd

Kevin Freeman

still still there, the been -- so and I going first in slower any our has contract pleasant when which environment. a need Again, getting quarter, really the But a we environment. not from not surprise in them. out carriers crazy There we're no we're we're increases on from anything is major pricing there's Yes. changes getting increases changes mean seeing and

Jack Atkins

given I dynamics a less seeing just with some I are on shifting the situation if trying But you what pricing was seeing a transactional bit mean get at? in I guess, market? there, the the maybe firming of I to on the maybe you little guess Marty, follow-up just I in marketplace, quick of competitive a part could. was going that, all Are

Kevin Freeman

customer any at on But just -- I as a it's Yes, you the any I'm what We're we I out whatsoever transactional model, show any it since go know, issues need our to our pricing, we we changes seeing discuss our not if cost seen basis. from when and really as it. no, and before we're first the on all I've pricing base haven't a quarter. adjustments is basically having crazy increase. -- in call, they need to mean cost-plus costing why But said not we last there getting understand that's what pricing we

Operator

from next comes Jonathan Chappell question ISI. our of And Evercore

Jonathan Chappell

of with recent quarter, of losses core actually you maybe flagged business work over of kind so? transactional freight being its this as of lose? last days, more has that or you back? last the last pick bit volume kind And uptick outsized. more not as been week LTL XPL about well, up course a Has the in Adam, are that the substantially to transactional run much getting more seeing where Sticking basically that theme. there's that few Or as XPL you kind some XPL talked business

Adam Satterfield

down XX performed average second would piece it's in core. XX%, direct XPL much of our Yes, down. of us. business, have contracts with everyone that pretty just the through in with contract core revenue business the still those really line our performance say, the more the top But was company better had the looking We And customers, really with I quarter. with

fuel the the XX%. quarter average an close that being fuel there's of A in down impact had price second that, surcharge decrease with revenue of a obviously, lot big on to

So we talking go we've And a seen. really the certainly, was we'd about the -- headwind that's over be see on. with. last that think had pleased consistent had with conversations certainly back to we've to growth contend been going that rather that customers trends we pure I we've -- And But year. with and growth

been of or to it's go through so. last tough the So kind year

with customer we've their to the customer have businesses the long-term demand relationships. But customers' of the value has had that that domestic good Old are supply I got impact our had the and that through state relationships, business continuing and on certainly And Dominion gone well. think We've economy chain overall environment challenges of realize us. with an people increase as

to underlying we're like that I kind getting And so that of may what many things of end been I And for the process amount just had seeing awarded of earlier, just not I and we've feel were kept kind of accounts point demand LTL have back same same that's where the where contracts alluding of stabilization. I have it go seeing feels types were of to to in was they've we the like business getting where felt that like the transportation, customers kind stabilization to we're before. the

things this down had in turning to start trends year. to all consistent our were might share to like it's end start market getting felt to our stable back We've been like I relatively where are favor. but going But of getting year. we we It's I -- that kind where were been felt slightly, point back to the see we

about conversations coming And to some failures, others in generally industry. We're that's back the had the when more we've to us. service goes starts of hearing the of business some and that just

XXXX. those good for through underlying of half feel back kind this trends and I of So and the about year ready being getting

Operator

And Wetherbee of question the from comes next Chris Citigroup.

Christian Wetherbee

event big about to minute, of capacity if come the capacity back a potential pricing for wanted we we picture, maybe think the kind see I tighten. to where in Maybe industry for materially

the we've looked the at carriers for space. I seen we've past, in the think these pricing meaningful opportunities in

capacity to cycle, what is think you see how given we last material that? conceptually, upside guess some about over the this back, degree but I future you as there event, of do If know as about strength industry? pricing will pricing were in a still think think you capacity the to in tighter ultimately potentially the opportunities I volume get I about come wanted sense that? potential gets of are

Adam Satterfield

to and the We're us, cost capacity cost-based that for mentioned support XXX our making think have talk increase having investments significant I about we customers process, technologies. center we're in lot. And service and it's to process. inflation our a need about with cost basis all it's Marty to and earlier, Well, we price year above trying inflation points XXX about to a that a that as talk consistent we have, the a every have

us you inflation of And to our generally goes kind that was sit to so managing that's keep I think makes see of shipment we're I into sense Obviously, the some cost and table a they're pleased across cost had and check, and that it if per in understood moderating. that conversation. numbers, and lot trying cost for starting the

fuel what the just back you this take to year. to equation, out of is starting closer were for our price expectations If to core our trend inflation

with like in So X volume tonnage can a cost opinion. inflation with second job a has my our our as done I is we check pretty feel a in low keeping phenomenal quarter X best and produce XX% I mean managing the in X in decrease to a remarkable environment. in that team

carriers with in just pleased to increases, the as stay little carriers well. are certainly are take start bodes think opportunities. making market so typically and I pricing carriers, we'd bigger similar would to our support going then close, own that think But even and We're that what for share to I see our bit gap closing that XXXX. I average, the our than a to to approach. we help the If other think And pricing got other that gap on more use on they consistent and expensive be trying was other well initiatives environment

to with add those we keep -- industry customers just value investments having that and balance strength us for on to and company. what stronger to driving -- would is to key looking the conversations demonstrating relative we're the operations can our the cash be that needs doing focus growing But the even our from the keep at and of to sheet what the support further us

Operator

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

Amit Mehrotra

Because XX,XXX Adam, it if are on the uplift diversion may XX,XXX lower in I any yellow is any shipment. some shipments if obviously, don't there? have from to mix from coming bifurcate that there's there tonnage? shipments, changes weight mix And know per observations significantly

And kind a here then of elevated new tonnage what we we and this for number if perspective? does take August from the assume look last it days couple holds, of year-over-year of kind like

the then brink and than And company, yellow, question, business. question. of of obviously, parter, they seem be you yellow I third X going the want know don't to there's last LTL is the specifically, they're X but And -- largest to different but address Yellow out very on OD.

out that And see company you there so service you natural looking do the the understand, relief question think is, of best just the it kind if is most Yellow to because maybe for I'm goes OD elsewhere. but you barometer a lot to of you right are out of or customers are is are some the there? it, expensive trying -- divert,

Adam Satterfield

lot try standpoint, a order, I mix. first some Yes. to can mix from changed to I a not but address sense see with answer in those if your of has question

We've pounds. so to a X,XXX or or and weight it's here XX gotten recently. about We've shipments pounds dropped pound Our little XX bit. gotten about about down about down dropped so, per -- average dropped to we

But lot not changing. a is

tariff-based lower is, some up we I are shipment. think -- that some generally smaller to of weight per be got seems a customers the more of that little bit picking

remains And that's or will, seen. So you whether be see, good that continues if to overall. been not to

carry just is And sequentially if this about expect that is our like the X we up little hold out over take into if But have, that giving up just all kind keep And are. of developing. July. about a that that of don't step possible stronger, updates at shipments that, we'd and talked but X.X% it's this day of trend they steady, bit trend, per get August to they continue impact trend I are mean, to X.X% a but about steady it we'll some could I generally, July recent steady, want obviously, obviously, the for this for as I there time things hold hold forward

XX,XXX year, But about in we per last day. were average August, shipments were we at of -- an

So already if and in we we beginning will, progression can month, earlier end that to mind closing a to of the I keep if to the there's steady. it But you month that's from hold the of XX,XXX natural gap, and that alluding see trends. the starts starting happens the what was were some

and So I since day don't year say, of take we've okay, just December know this just that a incremental XX,XXX that averaging gap where last from been you can't there's shipments really immediate change.

reason history winning trend, has why. the the cycle, carriers. start one say, to the a developing the to There's and It's way this been business out different of us. for change When can't we played been specific that's been end you the get is disappoint player developing. from And we it's

we an if. as capacity but think making don't think any have. customers, out than we engaged that know And trade they there we that just there I And But still opportunities understand come so with that freight well that more are event. that's direct is sure if anybody may may an with else. staying be our the of industry opportunities, that indirect said, I And

was similar coming an where I up quarters. period different second accelerating third be is had freight would that us significantly. shippers through everyone capacity example XXXX and And quickly year, we is will I being manage big in And and the knows where we a offer through obviously that We stepped them think get no our now. than and way with to we very freight existing think the service have can that very if customers opportunity the of lot the how that's another conversations and we into that conversations we we for protect a

Operator

question UBS. next the comes Wadewitz Tom with And from

Thomas Wadewitz

the to your the go comment network. to wanted on I in capacity back

target to discussion your that's about for I kind been what of You having referred big may guess terminals opportunity pressure. be being there above under related to is. that we've juxtapose with industry participants the the if you XX% the

would terminals of at, you being opportunity but years, Or and kind we "Hey, of opportunistic the a additional don't of you an maybe say, consider got that? wondering, if you there in of do and about we've that I fit maybe next that just to think look kind know, additions I'm like bring need bunch network, So capacity in how is the X more something than terminal well?" pace

Adam Satterfield

Yes. always Tom, potential growth looking at each out hitting that's generally region the looking projecting to that going know so And growth are in center we far we're we're to X curve. try capacity. service have to years each why facilities and of for start of where We opportunities. ahead stay

list kind capital those a X-year expand internally the plan need And ones we go and capacity where that target on out expenditure to it. service are we our center for of roll

and good So but we location, that would don't a example, advantage if sometimes itself but then an in X, opportunity of it's presents take maybe go facility, this need year ahead we particular for it.

We've we the XX in service are carriers period terms we that you what over we've capacity the long-term growing of of number back and it, And one public we years keep we're think the have the of time been to, market about in so again, made, know network. at a going share of over few but when we've centers talk expanding. our carriers it got to and this and initiatives the can in actually look look you Many longer achieve down gets additions industry. a that last total been

we're X just to deliver there proposition So when but that the off thing dollars able of make respond, trying the month they on support moved big get to respond part a growth to LTL be need be things they're we aren't freight we're our of our say their we able able growth investing can customers' to month they to the carrier got to dock the value in need customers that and and our the and to consistently at to OD. that's sure when the busy, is, be an us to the and they've rely can but middle as not of customers, end when potential going that's continue when be most

network. we So sense the we'll long-term in opportunistic if for adding our makes opportunities, look would to vision continue be and within certainly it for facilities

Operator

And from the comes Hoexter America. with next Ken of Bank question

Kenneth Hoexter

scale where back if in we look England like quick historical the on big guess freight freight right rapid back or consolidated I and shift you've 'XX motor had change. ways industry of New right, where an guess, I this,

cost existing a think I customers, business about discussions Are their about the XX talked -- of down Maybe talk many, bit you you looking out given, you Adam, are was mainly lower for maybe having that top but guess, seeing I I kind accelerating. is these any internal, little you are that threw new not there customer just also, versus quality. of presume higher discussions? from user customers, Yellow

facilities, excess and is what's thought as secondary well? headcount, this you the on maybe as capacity thoughts your you've capacity the then I headcount right, on know And XX% there your got on make shift,

Kevin Freeman

we to customers currently new Yes, Yes. every talk week.

over on to have new part business. bring salespeople their job and We of is XXX

discussions onboarding about there customers So those. and course, the and well have customers answer we new as of capacity, -- about having every questions but they're if out customers existing as week,

have show capacity, where We terminal so them our network we and forth.

labor, -- labor ongoing the covered. those far we have discussions. just as So as that are But

training a -- driver we we have have call them where drivers. We combo school

a and utilizing If truck onto as can on them shipments slow the and back our not then bring go dock periods, we're tonnage we during they increase. them

might like covered So pretty on come labor. any we it way. feel our increases, for we're And

can our way. confident So feel on take comes whatever I we

Kenneth Hoexter

follow-up here. or said And this said of has shift? a kind slow I just Adam mind understand, it then guess last was -- I clarify, been here. in a you do Marty, But a hours, the grind want not know massive to XX just just you I to

understand stopped picking guess just freight here. I I to up understand speed night. we're I which scale last with talking they the want about and

Kevin Freeman

thing are. same the reading as We're you Yes.

up. really about like we how on, our you, day business. our we don't to we're we're senior coming end what's know to put and forth to any management don't that. of So we're not really know And out talking every But that's plan within handle major team seeing it just business going how going going additional but

want to don't time. speculate we So at this

Operator

question the with comes And next from Stifel. Bruce Chan

Bruce Chan

captured the not a some but little in of maybe answers, more and this ask wanted sure got directly. if previous Adam I it I'm to Marty, bit

think given potential expansion than was what given yield capacity gains disciplined more the maybe from share share you you would exit, wins slower you and a impending a or about the If approach share competitor this, I guess, average price higher gains mentioned to outsized expect your market? see

Kevin Freeman

freight. to we're not service know, to much anything on you on do taking as going our by very too and trash price, Well, disciplined we're

So our truck and And we out customers business to we'd in that expect would we look cost if that every like comes that line. remain said, after existing of this something piece we manner. Adam were happen through disciplined

-- we'll And also from weren't take won't service happens if is that gain other and participating on benefit we'll event as on. their there and well. event take we expect and may that expect, we the it much too that doesn't carriers revenue yield have that it we a that in if from probably trash because just But major they business

experienced and we've for before ready that again. it So

Operator

question And from Barclays. next Morgan comes Eric with the

Unidentified Analyst

the perspective Marty, you on just labor headcount some Are confident just a had your you labor you mentioned I So from see tick follow-up handle headcount able confident incremental you or think you this that you're more that volume accordingly ramp comment. saying are can to freight. limited up of you do you handle a be can with the force from here you'll increases up? that surge if

employee. this flattish, cost been also little on how could last know roughly few trending I curious just thoughts Just of little, it's up curious And then a that per there. over quarters? Any kind down a was the metric. I affect

Adam Satterfield

do really our X elements equipment like Yes. about of But that acceleration headcount from mentioned, into I I a think we've piece. our business. capacity, got in and we capacity we've certainly or standpoint, the -- to people we've Adam. got the we've do and to through business plenty. there's the mostly -- in year sequentially can -- This last same. we second quarter back a levels seen we We respond through center going But service talk But is attrition and had decrease

of in the people past. think as that type shown I truck sometimes them demand back to such the that mean we call into we've that come that X/X we about but driving We've school, until well. job. school, that's got a of can flex put full-time our of I out Marty created platform our work in workforce mentioned, our on driving internal is and drivers drivers continue

multiple there's So opportunities.

lever don't And or continuing accelerated did sequential the other But trends. those as workforce XXXX second of pull. we really The as to that we back to business transportation but we through the we fleet. through supplement do this, half going can at XXXX this XXXX needed, could of our to like capacity our use looking purchase

we pull. kind And and kind and go so It route. always rather certainly as have to increases fleet it necessary, that of end could as big as quarter-after-quarter possible our can on pace of with final depends the be And so back a that's lever source periods XXX% of volume people. in basis. sometimes our at to We in-sourced of get XXX% soon supplement, during the to just that which move we had we but idea the on, the have that those would would on kind back was with we But we those very comes that go the we if to had linehaul that. short-term sequential our and -- it

Operator

Wolfe from Next comes Research. Scott Group with question

Scott Group

it's just Adam, an time. that you a seasonality shipments obviously, like just intra-month mentioned wouldn't like we couple don't the unusual it times I ask normally but a obviously of of know. short-term question,

last you we it's is like year-over-year a And I to Can just July? possible. like that's recently. like what share get X%-or-so yield doing what -- rate in the days, couple then just sense I think Any tonnage just want in -- is like if run ex-fuel of down of sense trending? yield very Maybe -- just the July.

Adam Satterfield

the now, fuel -- Obviously, surcharge. but And that's X% prepared that to somewhere per we see the it's right about had revenue Yes. comments, we're had talked to already getting the in hundredweight, excluding continuing X.X% down. fuel

the be should July think worst. I

we and XX% where At this then year prices fuel third average But quarter the will declining, we point, started be of are that continue again. continued when was in down to last about fuel on.

increase continuing or increases, headwind, get key be to is this half will less as sequential the core and be go at of to Marty the there mentioned will us look there. to a through we that second as we're So But it's whether continue of others, a year. earlier,

through relatively That's we've increases And over. those every yield to mentioned, sequential I day. able we've at what got around days, day, negotiate per you is in increases we going and constant, the metrics. strive turning last shipments those should if are we're contracts XX,XXX contracts see few But that right mix like been

seen. held that morning this XX,XXX gave the to of the just of from workdays, that constant of remaining numbers Friday that whether I kind And I for assumed happens the month. is next Monday natural of the through we remains of towards end it that be Some kind that today week. there growth held accelerates that XX,XXX and

different July last I them today, we we what our are numbers So about queue of over can year, per there and was came from you August judge XX,XXX put in little was XX,XXX. day XX,XXX of then where that if to sort from when that and there's in. mentioned, a talked XX,XXX shipments things

back from were closer last year. volume of we're to saying content, were where does, standpoint and a to we're we So shipments where day our that per if XX the it to this hold where I'm not kind

the trying can week back and next getting to big picture, think market then success bring what to the just going what's over -- be about keep to by the do long-term our and feel potential that business of next long we the still of we our ain't month service. defined quarter, back can the term, us what sort win confident share And potential -- quality it's next still share to I because be market or by we

the we our support capacity may that fair to at weeks. we is customers' over next And and and win and marketplace, beyond superior have Our because happening continue be a always share will I capacity advantages the growth. price few of value in network what proposition service to the maintaining think that delivering extend service

Scott Group

Adam, that surge to day X, that volume X, the a derivative in trying this they day maybe months bit more on but Is maybe from with extent basis, kind there is a that So say? get now. big point then it's it not weeks your struggle of but or it's the may others of get you'll you're volume, little to what

Adam Satterfield

where steady like the we're things. conversations looking having to and want in to the and But certainly, patient careful Slow we opportunity. got rates, customers and help to can. with just XXXX, want with we generally And and Exactly. wins be you be about

the much don't ratio so able value that want you offer claims on end with we time on deliver on XX% so of up fast to service to take that being You a and X.X%. on not

that way we're the through for servicing make go we on of to this there. what our methodical So we without may about much out sure existing capacity want be shippers opportunity be too and protecting taking

trends, to up When we the I prior there in didn't. we acceleration, follow stepped that continue look more others on where anyone you so than you you go and at you said, when think look back at like else. look XXXX, I from and quarter when then so second And sequential in

for sure in you eye just long-term term just don't the that it's the and So keep on making ball the always that short yourself over-extend vision.

Operator

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

Ravi Shanker

Is can you X versus at it your both? what's this I Like of them? of just on And days, competitor? X flow-through how few volume it kind topic, the from on you last tell to of uptick a commentary call, which in in the Sorry because is kind that say improvement is up the this to but those the much of that wanted see clean is of going basically of of X cyclical apart? the

Adam Satterfield

on hard and any finger really driving of It's your try to bifurcate put acceleration there. to what's type

have when then what a week originally heavier looked at. bit and As week be to type to the was final a least, We're And originally I it's increase. had into at little to expect bit normal going of would of mentioned, a an the We bit back above and I'd expect full I've to but increase. see forecast been than see would I a month. Monday this Friday heavier Tuesday we little where go

And a existing so freight freight customer -- part Yes, part just more month got some business it that's is that diversion? it. that's having it. because their own Is that's been of coming we're from an of surge? we've there's end that's Yes, in, of

So the we out for you everything get this doing why to why finger trends. closed on this goes of point did several pretty that nice month think some day, June like just X can't a put I We we're XX,XXX wanted seen shipments your that's I really, to, particular back when I shipment? But out we've strong. weeks, feel

would maybe per last of performance. have off average the like well. early more have XX,XXX, be. but back, dropped what though go too, the been end-of-month the even than off our a in been shipments typical months trends, We so I of month, some that's number trends had intra-month the bit couple good which pretty when feel And we we've good some a day dropping week-by-week little as around

month. made we've But we've as then for up the progressed it through

out project trend so performance now and So our pleased that comparison least of still to July we in right June. that we're and I've far in down with shipments been at it like looks day forward per when carry

is that of were XX-workday normal the probably was open half Some month way fell Monday workday. a of that we is X holiday July the that a and July

kind we seen you better if of that, So trends. for had adjust

more the per shipments month happened. this through XX,XXX-or-so pickup the been day before have kind recent We in range of

just the and few there. just like So you and I than been days been other over it's what year of to last work this slow can't accelerated typical put period since of the completely end see in on change what it's at a from driving last the then is not back your -- somewhat we've finger April would we go is

Ravi Shanker

tonnage quick in really savings actions that Super may short-term unwind comes if helpful. Very follow-up. any quarter Did cost this back? potentially you take

Adam Satterfield

tight We our every belts keep day.

managing that good and it a in makes can't it can stay of where spending have It's discretionary that's in, our a that it. and to cost you always and But bad. we're at looking leave sense. take in variable you controlling or philosophy times mindset So sort we where just

going If able don't have when that you to. times, need gears really be mindset good you're switch in the to you not to

out to had better was second certainly some the about. have pleased cost we a we than initially I that up in think ratio with able quarter what trim we talked I and ended So operating been

was to of we're I good that have earlier, think So cost see. some to I that And those going mentioned overhead categories.

to second XX.X% about of some costs direct Overhead he our XX% of our are and depreciation split have those that third to when revenue. We're increases. the in cost to have dollars costs continuing total XX% X.X% going to the We're revenue from are to will out increase quarter.

Our as over be general well. expect the up the supplies then be and in expenses that should I quarter second. up would miscellaneous would our third And expenses

to Whether dollar offset those revenue before. costs not to seen them we to about kind be what talking similar will of So remains growth there. or be got were some we've

the the but -- third. will to those be from So increasing second of some dollars

Operator

question next Seidl the And Cowen. from with comes TD Jason

Jason Seidl

try out think to to likelihood think that push what's a been this, pricing. there don't if excluding through, in Yellow wouldn't But near you bankruptcy I I is GRI what's is future? heard I a with but wanted expected again generally, at anybody there to now look the focus on this going have and do I occurs on happening. the

Kevin Freeman

going I that I take will with would say or January, same the before, manage said another don't to want I them. don't relates going and I foresee one to GRI having transactional way but business. to our happen mean in to as we're it without to year As we what's we took this speculate we them

cost, to do and that an carriers, for maybe that -- a on maybe had got before use our good we'll Who can't up I we opportunity. would knows. but So we've I after. handle some it say the and need firm it, and have speak YRC with other their of them they'll prices But as

transactional a don't see on business. us considering GRI I So

Jason Seidl

Okay. Marty, that makes sense.

not you're surprised you're it, you not So wouldn't but at level. maybe your exactly others expecting be if tried because

and coming not wanted on find being it's of it. what of think something within proper I race with not there wins slow even and Adam, and handle given jump if handle people cases mentioned the you with to people back freight freight a to, people it, won't sort be needing homes being able just to network? But steady

Adam Satterfield

closest people described. just have ultimately, moved to Typically, their some that they plays out it price chain, moving. Dominion. supply a But and next find keep a value home home, get carrier exactly that as but from standpoint. go freight and may just they ultimately, find supply And you a will got chain freight in Old if at where want may in the their to their to temporary then cases,

Operator

from with comes question next Moore the And Stephanie Jefferies.

Stephanie Moore

your trends differentiating been maybe maybe customers are wondering was could consumer touch industrial-focused? on seen more if between any you that you've performance those maybe I retail and there's if more the then

where bigger picture your Just then this same they of you levels you're kind year, from kind of of would stand thing, inventory go their hearing back And half any as if be customers, thoughts on the helpful. expectations color today? into

Adam Satterfield

overall. at XX, industry generally with that saw which or XX% of business ISM We our months in we And the I at industrial been now retail-related industrial the the customers. and or Industrial Yes. consistent look below XX our volumes. historically, assume and below is for I with performance quarter and think, has to second production, XX% X generally reconciles

that in some XX%. bit. supported aligns year. of we've of our back That's the be second that get volumes consistency normalizing would were conversations with volumes levels getting with what certainly are down when baseline we alignment And normal kind with to But sequential second overall, we of that this anyways. inventory the the sense trends had that quarter the some with And half thinking are of my going think a we that back into

the our And shipments X.X% about over X% quarter, a X.X% we third are quarter. the to have in then generally quarter. in second about Typically, decrease up the fourth

been actual relative -- sequential sequential wide our a trends been for gap past we've the there's XX-year quarters. So few -- the pretty to between average

get real into hopefully going back a seeing So like in average growth XX-year environment, to back were I felt closer trends get those normalized -- got XXXX. once to then we we then we're to to and

and some again, some this the suggest with But in then leaves of that picking planning -- second so moving which positive that like would terms actually of half it the were seems tea of up the freight conversations and at we thinking and we've year this had looking and customers for of the about in normalization and XXXX. was

then accelerated developments have we've things last over week-or-so. here And had that a little some obviously, recent further the

Operator

the And of comes Majors Bascome from next Susquehanna. question

Bascome Majors

Yes.

the that quarters? shipments like-for-like anything excess that from in you'd think the talk specifically, As you magnitude the like to days, versus kind that look capacity I size back that, last and over trend? months next getting couple drivers the you up few customer customers of by of little inclusive but several about the as -- about of else over a existing filling And last normal can directionally acquisition sequential mean to of new back you bit versus

Adam Satterfield

talked trends. From customers on economy counterintuitive. Yes. we've had earlier, recent standpoint, double-digit Like certainly, And I when has we've a in and we having But at that a seem decrease said contract weighed core customer may their and good calls. the look volumes has many about trends. on impacted this actually

wins accounts, at But business versus to national lost when wins and we've had volumes. really we account not those to they've the share but that the any national good larger our of continue our have we had speak losses, and reduced look just have with

find still talked negative lost save levels have where companies looking than in certainly carriers some in quarters has that's little and that have that and divert logistics with using us But and price they've shippers been for away that something as had our that quarter the think XPLs cost have We business the been down recent a reason. freight second I well. and was about third-party maybe to been to cheaper

coming prior But focus I squarely just in for shippers. back are seen into now, think cycles, many like servicing we've capacity

so to I itself won that long the over think share And term. we've how market lends

others. than relationships these of So We've within there's and have we any a us of consistency long-term our largest our lot piece business more necessarily between one strong not any accounts, changing that's are got and that customers.

they when so being sure inbound And our and need able team, here customers they're staying team, us. those business. of phone we're increasingly to And our calls they sales we're and that our staying know engaged take in on front making getting pricing some and incremental

still would demand So talking we environment it's above back like the would the situation about in but see overall the the to macro might see of love improving, what underlying a see, versus the going supply improvement good be. true ISM to really XX in more environment to and industry

Operator

comes Christopher Kuhn question from next with Benchmark. the And

Christopher Kuhn

just West I bit ports wondering, a June. the a in Coast of had pickup

help some of up I as and picks the know year would if you Just wondering, some of progresses, the it maybe volumes indirect saw that benefited it is then the that that if

Kevin Freeman

the China Vietnam Taiwan, from to XX%, read Marty. Korea is fell June, XX% and XX%. X%. day U.S. other I This imports in Yes. South the it that fell

of haven't coming from seen energy we a ports. those So lot

As ports levels Coast we East division there. a and those know, you are have the business on down

So if we're upward too, picks year up, I manner. yield, think it of far still in this prepared handle the we're movement global that whole so rather economy an any but seeing that, is but to not

Operator

session. would floor And to Marty any Freeman like to turn closing for the question-and-answer this the concludes I comments.

Kevin Freeman

a questions. great thank your and your have today want of all to guys after if call. hope please questions, to I the And you the free call you and summer. appreciate for further feel I you good Yes. participation, And us rest a have any day all we

Operator

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

now your disconnect You lines. may

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