Old Dominion Freight Line (ODFL) 25 Oct 232023 Q3 Earnings call transcript

Company Profile

Participants

Drew Andersen	executive
Kevin Freeman	executive
Adam Satterfield	executive
Allison Poliniak-Cusic	analyst
Jack Atkins	analyst
Ravi Shanker	analyst
Chris Wetherbee	analyst
Scott Group	analyst
Amit Mehrotra	analyst
Jonathan Chappell	analyst
Thomas Wadewitz	analyst
Jordan Alliger	analyst
Eric Morgan	analyst
Ken Hoexter	analyst
Bascome Majors	analyst
J. Bruce Chan	analyst
Stephanie Benjamin Moore	analyst

Call transcript

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Operator

Good morning, and welcome to the Old Dominion Freight Line Third Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Drew Andersen, Investor Relations. Please go ahead.

Drew Andersen

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

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

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

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

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

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

Kevin Freeman

some Adam questions. to today to Satterfield, quarter will be your on is glad call With brief welcome call. we third me and morning, our remarks, Good our CFO. After take the conference

softness results third reflect domestic in Dominion's economy. Old financial the quarter continued

straight result, our quarter. fifth basis on a the year-over-year shipment As for a decreased levels

developed averaging X XX,XXX trends for shipments the during months of year. day per our LTL XX,XXX as first the after per encouraging quarter day Some averaged the

loss industry in the service value business competitor, believe attributed quality this carriers can our the we provided [ of to growth portion of a we our the one are due be overall to to other customers. While new from and of winning large ]

The at offer price. cargo pleased to during performance our fair responded was inflection X.X%. We continuing service that superior effectively OD the in this quarter, to a our by was were volumes claims team on-time positive XX% ratio while

are freight said times much many have are free. more and sort carrier up There claims when selecting and that we ease means carrier, consider other consistent picking many doing As such customers' as and transit than shippers of on before, business. be delivering they a we the to times, Mastio XXth recently just time our straight study proud attributes of trustworthiness Company and value-related on results attributes. XX Mastio LTL just national service provider XXXX named this and year. a year, week, conducts the #X each different and carriers their comprehensive measured published to LTL and extremely for

to most excellence was XX professionals OD performance ever survey, satisfaction. commitment our demonstrates our for Logistic as and best of and recent many individual #X ability XX our our term. attributes the in and which marketplace unwavering the over the customer to We the win and in share Dominion years, service long of quality Old by the over believe differentiated has supported validated consistency market Mastio ranked as

proposition. for we the to the slower cost, technology. an Maintaining focus most ongoing We offset capacity our support support customers cost inflation excess year increases come economic element our is continues also environments but to for our service our in yield having available capacity it capacity when they each on yield obtaining superior to consistent ongoing believe during and Our value management initiatives. investments need and critical

investments, these most the and in result, volumes the consistently Because we positioned in we quarter. respond are to service importantly, during well center capacity, technology a equipment, our invest positive of As to people. inflection

ability have of in is employees service competition. distinguishes other us may that while truly it centers, to ] invest carriers equipment our that from to important is note [ our family It strategic the and technology,

The are culture and We term. superior company it plan. fair have in team plan formula, better gives years, the sound share over in to that a than consistency on strategic pricing has long-term long price fundamental long-term a a defined unique committed a to who are industry delivering and -- a a but for for the positioned growth our approach keep to committed to We team a may continued takes having any remain like we consistent these at our service elements us investing simple many financial our strategic delivering believe in plan. execution we results carrier win for confidence this by our other market and

profitable our growth value. As to shareholder can and proposition increase confident we term, deliver continue are to over unmatched customers that we value our the further we create long

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

Adam Satterfield

decreased you, in quarter day the a tons and Thank LTL good due Dominion's of in per Old hundredweight. per that partially in was XXXX revenue X.X% morning. by to X.X% Marty, a LTL revenue offset third increase decrease X.X%

of ratio to day our in of earnings decrease to operating slight and operating the also quarter. combination diluted decrease for We contributed to had $X.XX revenue The X.X% the compared this quarter the less XXXX. as in per in deterioration one third share

X.X%. revenue day quarter X.X% per second sequential when and third shipments to LTL the day compared for basis, tons quarter the day X.X% XXXX, increased with per increasing of per a increasing On LTL

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

from due of quality be other business and one new large the our As the overall the Marty We that demand customers. this quarter. value are however, also do in relatively of remained service provided portion competitor carriers to industry consistent has mentioned, just a loss to the of as attributed can our we believe, winning underlying increase throughout to

August. The compared and increased tons with as per day July monthly September versus August increased decreased change and July; a as increase in sequential of The of in compared August changes decrease X.X% X.X% an quarter XX-year the third months X.X% X.X% June; in average were follows: LTL respective X.X% increase during in is as for of July, an to the X.X% September.

decrease expect compared X.X% X% our October, when day per approximately we in approximately with by to our of X.X% day. X% LTL For revenue October will increase per to a XXXX, tons to

trend, our attributable portion expect competitor. While our competitor in we'll shipment October, cybersecurity levels disclosed sequential for we normal of by a incremental a return would a have of been the incident stronger in outperformance than is some We believe the that November. to month growth to this

related actual provide quarter XX-Q. details our for October will Form we in third usual, As revenue

third cost in direct operating ratio in as offset than XXX Our basis quarter cost. percent our to overhead of more revenue the increased the points as a increase XX.X% improvement

categories more we in drive While pleased in in revenue on increase were with the direct operating nature, decrease in efficiencies the had that effect improvement the cost cost. are helped a our fixed deleveraging our that

a increase spending efforts to revenue. with in We of expenses to the minimize discretionary percent best our also overhead as control continued

largely XXXX the capacity our We capital economy did, have execute anticipated necessary on for along our employee once of ensure revenue overall that increase resulted to costs, expenses. expenses overhead with continue growth to domestic the improves. percent we in as increase point to expenditure basis depreciation in in however, help increase the plan benefit XXX that, This the contributed in a a

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

the for tax of the XXXX. XXXX was quarter to our XX.X% XX.X% in be rate effective quarter. rate tax XX.X% effective compared to quarter of the as fourth currently anticipate Our third for We third

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

Operator

Fargo. We will question-and-answer Instructions] is the Poliniak begin Allison now first with [Operator Our question Wells session. from

Allison Poliniak-Cusic

that And that? then some excess just capacity network? to And little take Could you density much you how improvement system have in in on on talk more saw a that, touch bit way quantify the to you following today maybe any the volumes? about the

Adam Satterfield

Sure.

and current a direct operating which at we density both that between factor level did quarter excess now a was is sequentially operations in least the network on costs, Our capacity, of in the service year-over-year improvement is saw improvement that big We and driving our our in XX% the basis. within during our XX%. center improve to

driven long-term is and but support key by require of and volumes and the in the the inflection that density leverage macro operating or positive, was we improvement both say in we environment economic ratio factors: a yield always -- generally there support where leverage in we But drove improvement. haul load were good efficiencies dock operations but our within We nice had pickup had that on our we a operating line improved still had decrease well the the factor, as delivery in slight that's some from year. earlier two

of our all as So a the the direct quarter. improvement contributed cost revenue in to percent factors those during

Operator

with The is Atkins next Stephens. from question Jack

Jack Atkins

Okay.

the maybe you with I about your know disruption quarter we for things expectation from and fourth sequential October about into further of trends there as should takes third I about the fourth the quarter, could Adam, the market in or all a sequentially guess, of the how talk lot thinking October. maybe the the ratio operating But So quarter, -- disruption are you -- think be considered? progression to puts and

Adam Satterfield

softer. operating the wage worse get that A the factors so We X months revenues bit XXX quarter. of drive little than Typically, of basis a to within give the with Usually, the that. quarter new first Sure. September, we is our fourth points ratio X, third rate. couple increase quarter wage XXX

But which multiple we but for in that note, we stays had quarter, actuarial year, also as change. and well be normalize last driving unfavorable. are to it flat seen an previous conduct assume do past. factors year the what One we've in that, we thing generally that to fourth the we with the each assessment just as can That adjustments quarter, favorable, is that

So to stay basis see. slightly point XXX be XXX think that historically in assuming would those we range, deterioration can better what than the I costs we so different,

quarter normal a our out the that, trend with starting of little we're sequential discussed. versus favorability as obviously we Some

I of little a that will, outperformance so there. if have But would will versus that to they start, volumes head and a of bit some November little December. and where for back of a drive otherwise been trend us we to bit think normal think us kind help normalize, I you gives our And expect still

Operator

is Stanley. with Ravi question next from Shanker Morgan The

Ravi Shanker

of the how ] of where a lot up like think So to big looks like bit comes, the margins suddenly kind you do a you a It you that the yourselves just think maybe there absorbing a the and think rising capacity tightened you how like have network will. still XXXX Or and get a tide XXXX up [ excess as expect looks ] upcycle fair volumes be do [indiscernible] better the numbers I'm wondering come after of cycle when just the do yellow question, market of you pricing? -- incremental out Kind to in see in if the has [ play LTLs of you will their [ even maybe volumes. ] in?

Adam Satterfield

be what that so for we the of may believe we same it's a would -- next be to see were year determined bring. thing Certainly, think of a I there's year, thought inflection. yet spring this could But going to cautiously also of we're a year about XXXX. suggest the in we this optimistic Well, rebound lot

race. with situation, to As to continue the and post be we've that and before, slow said wins with steady the believe our measured approach yellow we want

a and go we as was in the we just win people capacity that trying in not So in to network, the as share the element have and we're right there but do didn't out equipment. in leveraging capacity much the the immediately capacity as service as there's the try well and out it to market, way

hearing from that in capacity that as We're much maybe we're people with don't missing as competitors don't are freight have pickups. products. service too have and capacity have may hearing about because there's market, know day. to of you much it implications on They negative and indicated your are solved I equation the the question And overall the starting every took their part

industry. when ahead a the win to So And XXXX the support, to in believe if XXXX market service value we our to try in continue consistently way actually get by we unmatched good positive that investments there, growth our stay be capacity a you've that's that there. fair think and some the where offering share, do but and we'll we volume make customers to it's on economic cycles giving right we we price it to at with examples I are superior seen that that past in when curve able take of get

And we the outgrew X those markets in at that referenced, that strength of despite I the underlying when look we years that those significantly years place. demand we had in just in excess capacity because

Operator

The from next Citigroup. Chris question is Wetherbee with

Chris Wetherbee

piggyback could I a Maybe on little bit. that

XXXX, know about talk guys costs. I about you think normally we As

expectations to do You I in else need year need any a that better-than-normal relative to guess able I exceed to talked of you sort guys about spark see post be yellow. average? as of 'XX, of to there able about happened general to sort in loaded normal to yellow, recovery be something XXXX? is sort of price naturally and not year. normal just be a you you pricing to think your for cost on the want we are in sort think spark I get is? be year what would enough pricing to take or would cyclical think next of spring of that because better how something than environment sort But that with

Adam Satterfield

competitors. to as the little into volume had next evident And that environment from of to improving happened. this to to we a price of in and We've cost year. pricing. of supply especially consistent overall, target approach we XXX points But different each can XXX we bit some approach think numbers. year, that's cost I year, especially I our believe basis is try believe I our above get that shock a think Well, pressure given if many sure. recovery. be But in long-term Yes, obtaining strong continues the We go starts our that,

in in as also think the significantly by justify inflation, of conducive quarter. result, invested years. trend well. able And XXXX And core we're least, the billion already I in same making XX%. the market, capacity. us we center inflation in capacity. really our business think cover we last did And We're We've moderating. are XX%. to market you We're over when XQ at service in cost that's increases It to our that capacity through but -- carry only the able close certainly the seeing the I the our LTL But down carrier public investing is increase and third need been to being can door the that XX investments capacity look $X a companies believe should be which to obtain that we've at a XX% to XX% there to overall as and

them. of think the that to And chain and to last in and necessarily we last that we're When over value particular, whatnot over think hasn't need continue that so had of support the you shippers I about that the work able it the understand been customers offer that proposition the X, the through challenges and that critical. conversation give years, forefront supply increases last basically the couple been have capacity at certainly but year, the over has us to

for like approach we continue it's we'll And But need results investments from to so ongoing standpoint, need our us believe sheet support to good an with continue in to what produced our we we financial we to that's like focus feel and have, same the balance but to make. on. that improvement we a continue always things

Operator

Wolfe Scott question Research. Group next from The with is

Scott Group

your ask perspective gains. want I to on share about

gains years a forward, into guess share I of as pulled good yellow seen from yellow, think gain we've about XX be you do quarter. years of share I what historically? will you future from pace in post the we've for guys So as guess, you

I were here Obviously, like is ultimately, this upcoming curious the And I how strategy terminal of stocking terms know of to do context mean question auction. strategy want I'm how the to much you what involved you this I your in bid. -- I add? guess auction? about guess yellow with in -- this What's growth? in And upcoming the much want

Adam Satterfield

on strategic to continuing and into details our us didn't Well, just any real out depend on to get given evaluate But we that we're to ongoing, plan don't those and going competitor from options. the it's that, want them. business fact long-term being able one estate of obtain

And -- fair to market what be having Our a plan wins price. capacity. available service is at share well continue us will superior for as service as give

XXXX, the to and we've is investment I industry others. performance share yellow comparing capture the at the win we just market the as than XXXX, go more against. XX XX that that volumes -- we able have over as market We've you with years we so the versus wasn't And for that when been market were the share our And that points look growth believe you share industry, in Again, the from outperformance we industry. well. at our last forward. look require share doubled will anyone else in It

attributes because the XX the ever We support had industry Mastio we've will growth, week. of a very over in our of We XX between overall award we have like been. within had the revenues our offering capital expect with to won it's And XX% to our this We're biggest to winner XX they equipment XX% survey, We've we years, widened gap over each this that past anticipated measure. certainly next have, us on but believe we'll we value real proud. of than the winning and continue estate expenditures. further that out validated to that the be ever market in XX we That just and that continue spend just can share row. than by performance the year be better years XX the

where our we're key are, be that's making service will continuously share. also focused but on good what So we improves to forward, we feel that and our win about to as we ability sure go

Scott Group

Adam, understand, any you forward don't is like I if long-term share post that So gain your different going yellow? think growth, volume

Adam Satterfield

just the XX,XXX not other dispersed. they're someone share carriers. all. it here us, whatever I was, now is with shipments, think because And that somewhat changes at formula XX,XXX, and is don't Not with they're

trying went an rebalanced up. some that probably be LTL probably yet well truckload there's into point, the will, truckload within world once as it of think that I element world be at to to That's the tightens had but missing seen, the I what at public element disclosed, there believe there's trace number in versus the shipments they that the may have landed of world. a truckload carriers least have

have freight us, the But trends, of in with conducing that America, service LTL whether will customers, to trends conversations things that long-term type freight which it to in manufacturing, no one we we least see there's be same increased lot the growth industry, support by that a is be think of North at improvement will for and the industry moving with we moving can for the in value continued LTL, we delivering customers. conducive e-commerce the by those that that's LTL more offer

to focused to and cost focus on. that's so we We've we'll managing well. what -- that continue on as our inflation, on And focus remain got

about basis value a the to what price equation, But when to the keeping point there's match offer believe you one can overall to prices that So XXX we our spread can no XXX we that shipper. cost can industry. we versus relative have think continue certainly,

Operator

with question Next Deutsche Bank. Amit from Mehrotra is

Amit Mehrotra

okay. that's if questions, two had I Thanks.

I you're ], including -- in assume better market a target know OR can OR weak OR that you and with wondering and freight pretty Does update freight a So informs the change quite opportunity because say to environment us the happy has you yellow. weak, what -- broadly X even impressed was did resiliency if been [ least. the of a I have the XX first you question, but environment? that's just that like a and in I broad the

you're ] basis, we're I And and get the understand know Today, carrier push little explain margin that in claims hard kind OD . to you cost is total value the which because price have reduces top. tippy or on of value middle XX% for of sure Obviously, towards been the for expensive. your you think value what [indiscernible] And on value [ were the want you you very guys it's Mastio historically Mastio the going to on may of a the forward? means the ratio share market exceptional. but help market it's of then that to And a how band going headline claims fair I national me market, a improve bit #X back with disagree on at position. I'm really the more we're up, ratio, our on-time up about X.X% service, But below your some provide hard but has the to this, yes, fair proposition better which that still performance. the our share. that you guys in opportunity been, band basis, always But survey. top And and moving the

Adam Satterfield

attention if Well, conversations is post were a is to the save never to but going of go freight by when because in picked And we've pay of there. moved when be not premium customers. then freight conversations it, got there's trying little away the never because from there's there have they or a lot it got a someone always a data. we the pandemic up losing important, jeopardy to bit, And delivered, us with for may sure. every it's to price day of and That got we data but go that movement we back and necessarily very what to have customer

slow waiting strategically been we for to the a product post to a world. are not you've available environment be a got shut the more outcome anytime piece, or seems for on a some sit think have part to the down, like each And within we've trying line I that honest a go sale, your through able on movement shelf looking the is pandemic year, value. If at production across shippers That for and strive those to and them being customer approach for. open, categories. can some But be consistent us, to what a fair of being from last an conversation have being is year, to about we fair there pricing us table

be able the to And to that at then And overall may said make like the some things were we're last carriers underlying with the because mind that in investments different earlier been I top year couple the demand. have of to changes year not of doing of making weakness over capacity doing, earlier, you had and some a their this respect pricing.

things have that manage are those that -- challenges So that through. you are you always

closed value, way pricing keep on pretty market changes all increase, us, if has service environment you it's because lot market market that sticky. period they're where is competitors ahead where XX%, in consistent XXXX, drives rate a plan versus having taken they've spectrum. approach. of But and that's what a when that was XX% than in faster we better share that the that stays a up like sudden, and more of us type our the will, were gap But rates now that someone share to come a increasing look the quickly. playing And reference And

that past months. many XX weaker. accounts large our lost in within not when great lost that accounts. We've lines don't over We the cases, ] have just at the in had demand continuity we We have [ our national look business top been environment has or turnover accounts

as So not They've to our demand much products, you tender customers' for if freight to been us. able will.

pricing it's that mindful relative others. So are something of and our we where to relevant always is

we XX for our year worked. long-term going communicate work strategic sure And need part that's been like forward. It's complexities to do of needs but keep consistent a with and on And past as that And sounds like real we go each XX% sense the the to do and our makes we've able XX just through we I But some economic our see it's to I we be what seen years. and that the make in That's next formula what just plan to outperform will. plan, we standpoint and model than want be you a see XX% that just customers. if a of to we can. the we executing cycles. us. numbers continue recovery, to scenes, we to move months, we growth revenues grow we'll behind the what prior over we same if our it able from lot that's as think We've industry, to believe think want average there's And a are simple

Operator

Next question Jon from ISI. is Chappell Evercore with

Jonathan Chappell

Adam, you're able XQ the of to handle that business structure without changing really cost this surge much.

October increase of in have to your more point a improvement? the expansion, to catch-up on accelerates ability lot Or to on and historical first sticky think have going recovery a be there volume third to still the more labor, about to broader you that some more whether as see OR basis of going lot this absorb can spare cyclical resources next a so you're year, and a So bit we incremental a one-for-one lesser the a can year? actually back in basis, the at tailwind recovery of margin get return surge kind cost if structure quarter next and volume is a of add where it's half demand the or you capacity as the half did loaded,

Adam Satterfield

as quarter a to labor in from equipment a to protect seen have were many workforce But happened. could, would positions this period. board individually we've the tried particular we certainly We in from we standpoint, great standpoint we an driver people and within definitely many standpoint, slow that center as that could coming keep service We've this spot in a intentionally gone as Well, over we've tried and from been as year. to the inflection knowing we've our through past on some attrition heavy.

are. We but manage try believe that workforce [ in were so. It our has here it to when continue to do that year. but earlier we thought didn't, well in happen obviously, it we're we we disappointed able would, to happen And through. to just manner the to we ] the was it and did been existing positioned that going And respond

we continue them to If Now some levels truck continue here, can run available sequential have see to increase, we'll from restarted if driving our produce and process drivers dictate. next we the have our hiring year. volumes shipment locations. improvement the as in demand through schools internal new to And

and playing place be to all to if being want or to can got not to us incremental We that will, to coming asking yes say be handle to we've try from elements to capacity in of if customer able volumes it we them. behind, catch having able if with for they're not and sure a deal it you make to and

So try this that did in rope a to we of have of a challenge and terms in doing [ the walk cost a so. to managing think year that great ] tight it's it job elements getting may extra little with capacity. I through always But carried we

we direct would our been We has operating to the given a environment. sacrifice able to think to managing quality. our in any decrease earlier said even low the volume be our I that volumes. cost performed so whatsoever do about our thought would, without it ratio focus where in But service in year We've

have through this fact, metrics In year. actually gone we've as some our service of improved

that continue rebalance team to is, of well. as So with our fleet performance add where to seeing. we're quality improving We'll the our team, our to and the we're pleased service continue efficiencies the

next of to get where want of used to the to got XXXX, through an through go some just as to cooperation go little improving be continue we replacements out things back all growth that our the we're the seeing, we've age environment, the we want along we operating to from we deferred of those As to help But ratio kind -- that fleet. And environment, year all so. worked average improve us will we way. a need or a still economy

Operator

with Tom is UBS. Wadewitz question next The from

Thomas Wadewitz

do in view and then I you've on If you talked don't And going Yes. bit down you talked because freight I can see Adam, improvement how those you've said -- margin improve? freight and a lower is do you the activity, a seen about about put price at for margin come next you somewhat inflation where together, you year. bit would constructive it year. improve. price even be like to market favorable factors as we think improvement about, you've think a the see seems like price next and two a be you what those pretty well, But two inflation you'd see looking don't guess, does think if supporting that margin,

Adam Satterfield

the bit books basically some hefty pretty related headwind, the to the with one have and more side think equipment of Well, this the sort a had, of a at that we that of depreciation last couple we've CapEx on we we -- OEM year. our that have basis had us from shortages XXX a maybe bit CapEx standpoint. points was ratio of fleet that parts years And carry if look -- than little you what's I and a were at in quarter, the happened operating we year to the optimizing was a required had headwind when would of over change third for that look challenges thing, the the on we

the to will we take you of month next times, use like lot can up, next A go we're another of think September volumes as you kind I of going a what sort So year, looks to if for be will. just and be. that correlate it's it already flattish volumes if year's the leg year, to through

all. And doesn't over months some around the continue improving But year we've next share as Then be at to some that where volume ratio even able turning looking improvement. will the hearing of -- produce I to so about got well. in to little the position of believe a a be operating issues then we're bit some the believe of be already that win X change top might a to we yes, we're in opportunity growth. the demand service given cost been we've where if it's that's see And we past, we get earlier, that on of at We may might referenced environment yield every in underlying a some day. that that, the

Thomas Wadewitz

market. you like of if you pretty lot feel mean at don't in see freight it So even 'XX, I good about where a sounds the in you're improvement

Adam Satterfield

-- August. I July. mid-quarter basically, the step-up carried And with been average forward I day when think And had that saw we we're where the December through post performance since year. we I in we standpoint, basically update, per last had the was were in XX,XXX from shipments we certainly then about mean, a And shipments per of at September. we so. pleased that talked day

incremental per seasonality. We would shipments shipments of month day the our saw that's been September, year, the per were about seasonality kind we little nothing where some where saw last close August. the that X,XXX up shipments would an talked in up. bit quarter where We've In increase normal it's a missing normal be. All the and over pickup, be That's quarter, day, of in growth first X.X% X.X%. X% were last to and normally, of step of of we've a the second but day I but a to per kind

and a performed will. what existing that some least that in better that the share quarter, new if seeing shift That's we've been more was last impact. just really customers giving and then So than at month are you of lot freight, us no the

we'll we will believe to that industry, there's permanent. So that on like obviously over volume return I gain some we the of last obviously the that a then been months in had mentioned, competitor. lot things some within going four And a the October see

where things we along November more have that count we're normalized, where in we to and is normal But and we versus back -- flattish well we more position into it's everything slightly, are but if as And environment been is will, flattish. go So as or December out our to revenue in with on probably back were you down trying becoming may build fourth where quarter. we seasonal gets to of the shipment if get the little year third December, a an the if if of more be and shake a last to quarter patterns, in that's had to counts out, daily kind -- difficult. would from It that, flattish, rather, being think XXXX. down I November, kind getting is still to just where good kind shipment of in getting figure X.X%

more issues, incremental our on happening capacity we'll significantly that even bit does, that's and share a we're Hopefully, today, would going volumes then year. then can economy, help we put we setup service then precall good when it like from to earlier, model execute, if prepared build and did the related. costs. environment we little I think to And But when said then not last get underlying just really for. build If be those even have feedback I like of managing customer then can that we'll the side just continue And positive where some not gains, at brightest volume changing. and type volumes I continue on that's if a are network of to it the we mentioned, just the more the our to we it and on demand shines can of up competitors is on believe then like that if if delta based does, there, that's we see that's

overall but see what so standpoint. from we economic may on And depends that possibility there, is a an lot out

Operator

Jordan Goldman Alliger The next question with Sachs. is from

Jordan Alliger

and just obviously, that mix about on a around mix. shipments types thoughts you're maybe bit call of getting, and quite weight trended shipment discussing is shipment, the per basically that, I'm curious of on Spoke the which today. sort down, price

Adam Satterfield

Yes.

and of was of August Our shipments in freight September, and range shipment here we that it as some hanging to saw per in down day. around guess, has a X,XXX down, that pickup that incremental really little Increased in bit trended about you'd well. weight I October we're X,XXX of that pounds, and pound per went which expect, that about X,XXX kind

grow will kind where to something that's in So at of that range our -- book be metric freight increased that orders to now. see pounds X,XXX that for underlying see in a reflecting there of closer And do economies. I we are we're does to X,XXX we've that's getting back a watch the that kind to widgets, believe right robust the baseline, to X,XXX-pound pounds X,XXX seen

shipment what that it's that far. metrics our on little have the take the tools did everything and investing long the made and a we characteristics that So a place. understand impact as like to ought the on freight during to the that adjustments per that have profitably on technologies yield in And as heavily is the built that's what sure moving the you be, to business we're all right anything, to And in we're pricing incremental make thus bit decrease with quarter. you our those understand in moving favorable we've I -- but -- freight freight pricing seen we've handling that think the of weight

Operator

The is next Eric question Morgan Barclays. with from

Eric Morgan

term. want just the come back to to near I

you But confidence said market on basis. you're on sequential and below September, you demand for underlying share think seasonality was I have tonnage about gaining a X point average study.

of that an earlier kind shifts. of if the wave guess from you're have wondering you if lines of seeing price clarify service just any to can premium new initial I you along premium but and just So are this how the wondering your maybe any question, attrition from also customers offering? responding share

Adam Satterfield

August average tonnage increase in X.X% X.X%, Yes. We a from a sequential -- from the up increase. change XX-year standpoint, is the September was

a we least that national had year seen home versus coming was immediate making. -- and September existing if had to favorably within carriers their likely find year, networks you us stronger for freight, quarters bit to performance little we what that and they large in that had the few on the continuation So events, of had an compares July, the obviously, but of that just of at been end the earlier the the month accounts freight some leverage the point did. third a point was to of last industry the the first change, shippers I seen that has or the that the in driving We've that made had call new our of any really to what they no in at that that move of in pickup were will,

around. in that right are year, seasonally I we fourth the next is shippers to of quarter chain figuring go But overall going there's solution But especially to that think year the environment we of will at what's looking two periods partners slower some shifting and during that the supply first believe their have. share type to believe and continue that as be through probably out the the be quarter,

think will the X be over so we'll months. that happening And I next that some churn see

are we've customers be deteriorating, competitors previously now I their And when time service there those margin probably a periods. provide. will seen are prior accounts at right some at were but that of that looking that the can OD probably at that increases on taking the is think are that in also types value

next And to There strong. same to time. all this freight of It's on those there of today. is the but And -- think And but that very situation having the delivered demand-driven, through those of have that Old the level And be to volume didn't And do opportunity quarters. obviously, take get a as in that able for not we're few Dominion. environment some types up, at customers those of have call all XXXX. same so. able some similar increasingly because missing standpoint. conversations, capacity on we're progress they on from that, the us of do the maybe pick think create a to elements they're could at the They're different, types are not starting simply tremendous volume to point, we we the demand lot incremental be but same volumes just That will they opportunity I was was conversations incremental couldn't pickups, it the incredibly competitors is place

Operator

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

Ken Hoexter

be obviously, But about to I it's taking earnings, market, this you're some was able growth guess yet October, XXx the talking that expectation SDs the faster OR, more the the keep in downtick at bit give so back morning, growth. for maybe you'd this measured maybe of a X.X% Adam, here maybe in expectations. because stride little and X%, the

this nature Scott was thoughts into discussion sustained the great dig capacity process There away just So your it, to everybody with So into and it this. I which got industry about And up, growth. competitive continue right? you But on go bid centers means maybe outlook enable thought [ of going thoughts that elsewhere, take goes share. it the doesn't to the that was coming ] the to away. maybe service go on and your if would and just earlier to want you've a

of we're those. [ thoughts of does you on exact just that on the couldn't tightening, of what I And your of it spills the on out top to market nature give distribution to that? ], if lack thoughts maybe but your on Maybe ability service maybe just center bids, capacity the of the right, take all that more stuff, factual your timing so give know, Adam, the the of

Adam Satterfield

Yes.

bids over weeks, think be few the will due. next I

may so industry think reality in the before, were of lot all obviously, up new of the month will or be home. leaving be believe service and in with the out will I a so They that found And a now. months I those is shipments several that that end figuring who still capacity next overall. centers. those of But some place been it's determined, some

might incremental how use out you much the of to on someone be sense, to kind do would you would would think and you've -- so that capacity you that how look And investing, it and want how to go about buy thing. strategic that make have got side

thoughts of others our as we some considerations sure are grow. in those again, that from that I'm so continue have well. we But and that we And standpoint, believe that to the have

or trying that it's if think I when closed to before was of totally they the of on we something or We next to to long that path offering offer term, think the to shape the will value the That's we XX that the in way, one that over these in we continue it's we about independent, after quality believe lens we and invest service have try their be the form, in of we biggest whether doors. Either will the bid that which we properties investment. were some back going place. because market through, and winner that's view our share years business require go

some and ] us well going a even does, as further between you their because price that to go thing requiring mean costs basis. and that them increasing, could doesn't [ then gap are increasing good it's exists win And rates, that share. if increase maybe you're of Just be someone our others. competitors' to closing invest probably And if for us cost

seen any where to think this the past more happens. when I And and point it that our types to economy will those and tried on into get type quarter going continues really slow think that is last not environment of approach to demand we relatively true strong is We've -- performance we're be in at we've prepared when it underlying I the you in if environment. we So consistent. say inflection for this remain of call seen some the strong demand in steady,

It's about long the So capacity. equipment comes to elements all good all term, done it what you growth and comes. over service we're ability capacity from with as feel but be matter of we of and than respond to It's us, a we thinking Service well. people when where can just it to centers. centers elements it more got have time drive before for to ready and it will. And are of just about our

we'll when come. time be ready that so does And

Operator

with Bascome from is Majors question next Susquehanna. The

Bascome Majors

in of update You ready or about showing are some first, where year. about where thoughts for give facilities, talked and it on versus And earlier you an about any starting to regionally those functionally? may get people that next equipment come and capacity headcount in now? invest be us growth constraints again your are Can you the up

Adam Satterfield

be. shape But excess with probably center over type we really a not pieces seen volume We'll months. on good to the necessarily that even the Yes. through We're the we're last the other we capacity. I and we've equipment, of call. to where and as that earnings we'll service our equation influx are, like our about XX% it on point, and we're with at same optimize in evaluate this those might bit two side, the look talk at XXXX look -- XX% mentioned capacity plan earlier, that at formulated steel about little continue heavy in of the way. at We've of But what few we'll CapEx go next

bull what case 'XX look scenario well operating forecast can of But fleet the that whatever that we given growth, plan we growth an really and size meet strong sure got baseline should like look at to to be. indicated. case a our baseline might bear as scenario And levels kind for see always then the necessarily at if we've our that were not or make the a

meet volumes. people side, been able we've the up On obviously, step the incremental to and

the we're that had Our combo dock people type them working makes drivers think se. I we on per which and work, are more getting of happy And roles.

So that, we're to employees back putting a able into truck. leverage those right

will where some so a into are with incremental we're But see I next And in get growth from in do require it think spot really as we elements. now great our overall, year, we we people. require, investment all will

the we've why as well drivers, on freight that's employees of are platform well. the we in their our and certain on locations And restarted moving hiring that are as schools, some driving for truck docks new

be things as [ probably if as capacity We're the it we're digits that our coming levels trained with or otherwise that to maximizing make load growing you efficient all that sure our make cargo dock to board tools see not of Vention will, but claims environment shipment important. efforts right So we add X.X%, using of on But going double the curve, will as they're for are as can't of ] they're of just ratio They're factor. just the into properly throw where thing. we the at kind is where us, workforce we match person best continue effective claims sort to that on won't. you especially to workforce, a our sure ahead that we're our so the an we to at we those keep making

see we So the will, that to ahead if for that training really to curve, you of we invest appropriate sure make we growth. reason, try in get before the place

Operator

Bruce is with Chan from Stifel. question Next

J. Bruce Chan

on operator, just Thanks, on your everyone. up and of maybe morning, want side. to some comments commercial Adam, good follow the

point of of things feel targeting are field you You've I accounts to or ask like there changing and competitors post want at the have a have couple right yellow. got national are sales share on fill out that that mix then And pushing the network quickly of you parts this field that if the XPL additions newer on business. you just to kind that and maybe force, out growth. keep happened of any there the

Adam Satterfield

that the financial relationships, letting work we've our that staying I local groups got you year coordination customers, hard symmetry of I when success team great account them long-term well. field to and there, pricing build over here our hand that been in when Yes, our is like results. and costing a with they place front that sales know feel at in of our our evident in we that, as continuing have our sales team -- national think And working have that and we're us, last and need and hand look in team terms

We've an overall but a it up we're had And improvement about quarter, of overall at market carriers, quarter, pretty the that green when that business, first the particular of good I business least XPL business the the was weakness, X/X transaction down of by in -- of bit ever of few little third in to book revenue a some the way our That book July. X.X% accounts bit In type slightly, we that a are think with we putting within XPLs. area the was just growth of that lower does there. quarter, of in where for in of actually see. seen But little quickly the so in firmed was place. so pricing the end was come

is back continuing us to to can So as that well. starting hopefully, be some that and come a trend business of

accounts a those our as grow great well. with year we've team ready continue and But mom-and-pop of to really to all that mix see XPLs, will we the contract our growth opportunity and a within got for small XXXX. in good continue And categories and leverage our business hopefully of be sales

Operator

Jefferies. with Stephanie from is question next Moore The

Stephanie Benjamin Moore

first and just easy and cheat essentially I'll question. reask keep here on it --

and what expenses major dynamics your achieving X target of kind that the and in handle growth I industry events immediately called think to as Maybe of of you XXs kind XXXX. the the how own the Given well just strategy? saw current of and last the as just the you spend months as -- your well OR kind change of over couple own is obvious moderated timing change balance capacity pretty this investment still OR [ weak in call, ] also, a out environment. is And quarter on which elevated freight pretty

Adam Satterfield

operating se have frame ratio, might a [ we laid felt the that's because through artificial little to put time we some a beholden bit out a annual short-term were on Sure. time we It's long goal a didn't when sub-XX to go -- like per and macro we line ] we and that focused versus want things to and weaker, -- be environment do term. that more didn't

expenditure biggest depreciation try we at of focus when million increase being in ready digits now, plan as and were ratio the that where we down but growth. cost, the term other seen I looking volumes a and operating that's at something where that we And have out again, one we've environment capital to result. -- double a have comes that's hand, back, we when our the a you it long right in shows was at that this that is tonnage the leverage. look And in an think that year, year point, drag get probably on future And at you this for the look in come to on particular, when take the $XXX

to pleased costs that the volume cost direct once of should cost on of we to We've revenue direct were deterioration the last side. XX.X% In But be with completely the right second year, overall the overhead been that was quarter, our at XX.X% able there. quarters the overhead compares our environment, revenue, [ operating back so ratio, operating and in XX% performance ] XX%, with while third last we and with I've back to came quarters and to closed. And of to done about get our of ratio. to something our leverage year XX third get a improving already so couple XX.X% we're

through recover any we've been when the we've revenue look was certainly we've years, we're down, subsequent we've and focused of opportunity, what an back in to we revenue gone environment year prior leverage when where recovery. bit the have And little when And had think operating typically, that on because loss that's happen. a OR been lost down, through I able ratio volumes on can believe

efficiency cost within we'll of of the the to get the drive areas XXXX, by on operations. direct can and our to end for us gets perform continue time that opportunity we continue will we but to where we So look as side see

get to growth a with produce OR. start having can at in much we that XXXX, the could looking that, not if invest beautiful thing some get on going as potentially along to some But potentially there and overhead side, when leverage revenue you trying

Operator

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

Kevin Freeman

questions, Thank you a your anything have all later today We for call great further. day. you appreciate you give if to please all us your free and participation. have a Hope feel

Operator

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

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