Old Dominion Freight Line (ODFL) 24 Jul 242024 Q2 Earnings call transcript

Company Profile

Participants

Jack Atkins	executive
Kevin Freeman	executive
Adam Satterfield	executive
Jordan Alliger	analyst
Daniel Imbro	analyst
Christian Wetherbee	analyst
Scott Group	analyst
Ravi Shanker	analyst
Thomas Wadewitz	analyst
Jonathan Chappell	analyst
Eric Morgan	analyst
Bascome Majors	analyst
Ken Hoexter	analyst
Brian Ossenbeck	analyst
Stephanie Benjamin Moore	analyst
J. Bruce Chan	analyst
Jason Seidl	analyst
Jeffrey Kauffman	analyst

Call transcript

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Operator

Good morning, and welcome to the Old Dominion Freight Line Second Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Jack Atkins, Director of Investor Relations. Please go ahead.

Jack Atkins

Thank you, Gary, and good morning, everyone, and welcome to the Second Quarter 2024 Conference Call for Old Dominion Freight Line. recorded through be dialing July code being beginning for X(XXX)XXX-XXXX, is XXXXXXX. and today XX, call and available will replay access Today's XXXX, by days also of accessed webcast replay company's may The for the XX at the website. be statements Dominion's contain Private Reform operating expected XXXX, financial This of meaning among statements, Litigation the forward-looking and call of within conference others, Act including may the Securities regarding Old performance.

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

You in operations and important results forward-looking the release filings hereby affected with discussed actual that others, this be and and the consequently, Old may by factors, Commission Exchange from morning's Dominion's are Securities the materially the in news and these set cautioned results statements among forth differ may statements. in

update whether no events obligation The new result or otherwise. forward-looking future as any to company information, of a undertakes publicly statements

the As before a begin, your we time we question limit that returning just that today you before to questions note ask yourself at a to welcome final X queue.

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

Kevin Freeman

were disciplined economy. congratulate to possible per hard diluted work to strategic sluggish the year-over-year fair as our approach laser our our consecutive quarter. some our at take with and as focus earnings long-term After in quarter maintaining quarter With execute providing made in during continue These to of to today me CFO. the call the growth revenue our efficiencies ongoing price remarks, represent be call. on Adam spending. our conference service second who and I'd the despite our family results morning, yield, and outstanding results commitment like superior discretionary welcome and our Satterfield, second customer questions. third operating to Good team well a Dominion on second plan by the employees we the to domestic Old your share managing for OD is glad our controlling brief of dedication will quarter

level service and the of over superior is delivering Delivering promises we claims to Dominion they help for the of continued to the value cycle, time fair Old Promises. their allows once has a and free, at on ratio cargo business level economic our of our relationships turn, report an time. have their X.X%, cornerstone a service second us Keep Freight to competition. model, delivering service our price help customer customers Line that World has XX% customers quarter, customers keep We on-time regardless proposition of our again damage of freight the which, pleased strengthened and during to our from Their in to by differentiate their our I'm unmatched made the continue provided constantly

also national is Company named the who for as OD Mastio LTL validated service of The #X years. by consecutive our consistency XX & carrier has

approach Our customers a supports strong our as trusted of means to industry-leading partner, consistent us also track view our record which cost-based service pricing.

the yield expect. also capacity while to long-term customers further technology cost designed supporting Our strategy inflation our management our offset that help is and in investments

to our in market carriers have the LTL over of the has share been over capacity almost same XX years, supported invest and ability which only to the our double one consistently period. We past constantly new

Dominion differentiating will and curve, we been growth be continue capacity-constrained quality Old to of committed ahead are which believe a for to and constantly industry. investing another We has anticipated what our is what

excess service improve capacity cycle, in service center year. economic which levels we maintaining our be of case has reaccelerate. These short-term our most capacity XX% us our years, we grow hasn't are over XX $XXX plan on customers does which with past economic periods estate quarter invest customers the another to the positioned Over starts network, through end network, invested approximately of downs that the to the have competitors, will demand, create but our our million when been support we to critical time this the and and center of billion confident the and some business in investments ups headwinds have environment during cost to with second the $X slower real over at the with

will ahead. We the to position capacity network us to investments simply years made that economic in overflow believe capacity continue all we more we of and combination best-in-class of future, the LTL of service the activity. handle for the that stronger into as being market our With Instead, growing grow. network demand said, to in investments the during look our are believe disciplined service-sensitive even capture periods not

Over won of strategic consistently the long-term our carrier plan opportunities challenges. short-term decade, Dominion last Freight has executing market other remaining than and share line LTL by instead any Old on more focused

and to we economy, will continue value investments most drive to importantly, network, in on the recovery customers. our continue believe our While wait domestic a to our we in the our technology people,

in shareholder the our we over positioned share carrier the win while term industry a value. result, long market further to believe As best we are enhancing

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

Adam Satterfield

in increase year. morning. in a to and tons LTL per the good quarter X.X% a the The and increase in Dominion's hundredweight of second day. increase for Marty, XXXX per revenue increase LTL was due revenue billion X.X% you, of was $X.X from Thank X.X% revenue Old prior a

with the improved operating X.X%. to the per basis, XXXX of diluted our quarter compared On in second the tons per first day when increased increase ratio a X.X% the per LTL increasing XX.X% LTL day share Our contributed quarter. day which revenue XX.X%, increasing shipments for per and to to $X.XX to quarter X.X% earnings sequential for

sequential comparison, in April and day the as as in in day. changes follows: these were XX-year, increase an sequential X.X% change during as average increase per June for of to an increased per X.X% X.X% and to per revenue of an increase May. tons The metrics day, compared in of compared the shipments includes compared For day X.X% April increased per tons second increased LTL May monthly to March, as quarter X.X% X.X%

an the change these in in Good day X.X% note, respective March, sequential is average March of the in years decrease of June. of in X.X% like increase when The May occurs this months tons X.X% and to to in per April, an XX-year X.X% as LTL that in however, Friday year, is increase change would from a it April for did average I increase. a

For per will the the remaining by historical quarter. relatively days normal July, of trends. follow consistent July first with second assuming revenue the day of to revenue our we X% when X.X% growth increase XXXX the our of was half rate through approximately month compared day in The July expect to per

from The began however, was comparisons difficult, when become ultimately of filed bankruptcy. have last freight now for see week that a little we July large competitor a diversion final as to more year the

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

efficiencies. our improved for to focus ratio primarily revenue on second due and operating basis of continued XX quarter quality XX.X% growth the to XXXX points Our of operating the

our variable allowed continued during as quarter, second of Our us a these job to of team costs a to do direct, costs the percent managing great improve which revenue.

Our efforts our despite overhead to minimize discretionary to increase best percent as spending. however, a costs, continued of revenue

both main X the before, said a to combination often which of the favorable are improvement have environment. and we yield, operating density macroeconomic ingredients As require ratio generally long-term of

of favor, team achieving OR. we see in these sustained that remain domestic initiatives, will likely generally momentum continue that operating can before to working improvement ratio market density. we of produce opportunities progress once on goal make yield our While it elements have and we in sub-XX towards execute shipping in again We our to an economy leads our a our our incremental take improvement annual operating confident in further share and the both management demand

cash until agreement, totaled current million of share accelerated flow utilized $XXX.X for $XX.X for and of and totaled later million same XXXX, cash second while $XXX.X those program and from million for million while respectively, total settlement respectively, $XXX.X be We dividends Old quarter $XXX.X during no the on which that periods. XXXX. repurchases million same November for is million occurs Dominion's the and repurchase first quarter $XXX.X of and our periods. for includes $XX repurchase cash XXXX, and share capital half million our the operations final $XXX.X share of were than first half $XXX.X This the year-to-date would million million deferred expenditures second

discrete We second was of XXXX due tax of was for effective the the for originally Our questions items. XX.X%. anticipate this rate this currently our tax remarks quarter. we'll the to effective was of prepared concludes benefit quarter This quarter rate tax the be to floor Operator, our lower for to which rate third tax certain than be at for the expected second The morning. effective open happy time. XXXX XX.X%, XX.X%

Operator

Jordan [Operator Sachs. Goldman Alliger is today with first Instructions] question from Our

Jordan Alliger

the do, the to often terms could the day seasonally context and XQ as economy, sense given you're it things seeing wonder, revenue ratio. for how operating get in I of in is to possible what of per you look some XQ

Adam Satterfield

economy XX XX that's with too think ] XX%. Unfortunately, that's being not The sure. now still the right ISM to months. And [ Yes, to an much industrial-related. contributing of XX% past dealing with us XX% be our below revenue of we're I out to continues

But some standpoint. some we this say will through like in least that far you July a in so lot hard from bright to revenue a know, to will the at things look of been line sequentially. revenue and So when and June the it's spots a feel at of -- go performance the have we basis from trend what happen terms as month dictate I volume a and there top saw

as to So performance we'll the And we update that that we out through is quarter. once always finished. give continues as August progress do, our will mid-quarter the how see with play we

on based I XX And second of third think we kind is in be. which the are from kind typically quarter. of X.X% where that's revenue way goal a we about increase quarter. the revenue typically, regardless It's the a seen seasonality like second normal average that But sequential the think to would certainly point is the achievable. from And a third quarter-to-quarter what stay goes, sequentially today, flattish -- the standpoint, the increase if the from of I about to we've basis change

of top XX basis that the the of increase, plus along of third still or that think spectrum that's But or lines for I we where something along quarter. basis basis, kind course, XX point that's line give I minus, think a achievable points. minus certainly So follow we from generally sequential ourselves that something plus very

Jordan Alliger

if a the I on And just as demand. follow-up, just quick could,

index be You finally change sub-XX mean, as tough through we of and the tell well. look ISM that and there do new Or that you could to orders as you still? the talk feel is I sort mentioned to I as year? move it customers, ahead some in mean,

Adam Satterfield

-- the increase there. so Well, first we're feel a from there March bit. had acceleration it's sequential of we mean similar had from I felt May June I and we some a to think little to little fall starting We in things performance of finally good what volume nice still and good Again, bit increase I a the to somewhat through like are period. June. a final the tell. quarter But with like a month standpoint tough to had I

the But we then it's third we'll quarter something slower the here through quarter hopefully, that We've some are seasonally typically and building. continue first quarter. fourth things got to So and go watch.

standpoint. that the cuts I at watch that there closer of the seeing out some would the that help would Fed a that improving things from and we a suggest interest of little factors think some the when would bit to be be may you would rate business macroeconomic environment indicate certainly look some maybe may

seeing the seeing. seems continue watch to bit have we and it a have to cycle, end opportunity But little just than close a certainly feels of we'll coming we're it us. more like see what's long So we're to slow out what like presented been and there to

Operator

with from is The next question Stephens Imbro Inc. Daniel

Daniel Imbro

pricing Maybe, the on Adam, side. ask to I one wanted

year increases further an guess, I how pricing other comparisons was seemed improve rate stepping as continuing the suggested to in seeing June any tepid of I a actually stable, the think back, standpoint, changes? to point, from industry update pricing the back half And demand your can this industry just Are we difficult? bit. mid-quarter to remains get GRIs is and support July? more

Adam Satterfield

Yes.

what yield philosophy. think our of executing on is a just continuation we've long-term I seen management

to our in inflation . continue cost from in investment target and our customers continued offset We capacity expect us. support increases and that the technologies that

Our and normal of June full thus look yield fuel, sequential, in be at that from trend revenue July metric. for that X.X% seeing if in least year-over-year to standpoint, what would is a the similar just implied far X% per seasonality up in sort quarter, hundredweight, at what we're excluding normal it pretty you

And some some August of and mix that more we'll in go will be that change September. so through

was second about last the of we year, through the our industry, disruption down for you third following If decreased quarter it pounds and a year last overall weight bit of September as the 'XX. versus think quite XX shipment to the 'XX, per quarter move August

the in shipment, continues would reflection per been stable. weight and I becomes quarter in economy, is if has with were at that improvement second in to a there least where the mix June, a seen pretty in from so So increase further weight like If then particular. that had far, standpoint. we've is we per our what that any that July consistent shipment more in reduction challenging in But see in to just

see continue that out. to how we'll So plays

Operator

with from The is next Wells Wetherbee Chris question Fargo.

Christian Wetherbee

Maybe, you It's XQ. certainly could bit a about pretty quarters from couple sequentially the flattish last little of per shipment Adam, trends. XQ and to talk weight

change could general be sense maybe going just you're you're of forward playing Obviously, to seeing of thoughts sluggish Just as a there's a but economy part that we're kind out. any moving how your that in July, see you of in here, get that? on what if

Adam Satterfield

our July, the like at last that's mentioned. we've seen. an in happened think that saw change around we've going well. like took what that industrial weight year, really think down mark. unique just bit, end But into real we quite right bottom. the a kind me, bounce has as feels I along I bouncing August and of it I And No pound continuing indicator of economy that Yes. to still to that's Obviously, just the been the where been And change July, X,XXX

shipment that be that and I So picking one of we're first start be might some picking that be that seeing think the on if early indicators and up we signs should weight orders general each obviously weight lot good up for that incremental to per operating of truly measurements. volumes leads into lead underlying is that's economy We get improvement shipment. Generally, to going more a can the in improving. in the generally efficiencies if and improved would

that in the So the all capacity and our network, service in are prepared very we of people capacity center fleet. our for our things terms of

to market We to and the does, are primed position in inflect respond fact, in the whenever positive.

Operator

is The question with Group Research. next from Wolfe Scott

Scott Group

you then to tonnage yield? a just I'm And I if make The understanding X% XX stay just worse, Are your saying get then X.X% first. down Adam, increase, revenue, the couple of worse. X.X% giving? between the can, the that points sense don't to and if is the I message degradation about commentary you're sure, any OR normal which and we of bringing we basis with typical follow-ups, Is want that not OR can it's even revenue sequential full that still normal.

Adam Satterfield

Yes.

as to going XX keep go said points again, not we volume question progress we that to a just around that or I to But our happen. can I environment. the mind, is great third managing the will first, put basis target. anything with this continuing And continue we being last do And minus with costs quarter. do think think I we're through a quarter, specific, lower team plus that answer job that so like think yes, to the in being that, in

to our got obviously, typically some it's a contribution, increase We're have certain through little elements quarter. so And execute bit progress as continuing cost in we've on If easier. plan. we the revenue CapEx an we

will second. versus have quarter incremental the third in . So dollars the we depreciation

wage go it out We as on September always Xst will of well does. increase have a the that as

continue that. to we're improvements other door and every the monitor to discretionary as and have we'll seeing. of we've out manage seeing dollar that's going business and get operating measure efficiencies, offsets to some But and continue the some levels you managing X there been So month well that

and do things, we're to manage we'll continue to continue those to going obviously, all achieve. will of improvement, hanging have we'll So our things and hope that I goal but easier, bit that certainly a but out little to there is incremental see revenue that make

Scott Group

record sort in sort to any buyback Is in new about then this of quick this returns? And think run change the capital a quarter? rate forward? Is going thoughts, just of a

Adam Satterfield

change. it's No, no

think you to when our years second similar. saw stock you as level, It that go ago similar to but spent total year. back we drop back it's quarter performed I we XXXX, the was billion say, $X.X of record big in the couple get and to a a that during

was some quarters. from back But was the just going last phone So pretty it our It more stock through spread -- the had quarter's call to hefty XX%, XX-week highs earnings XX% call. off year.

now with we've we're so has we past, And recovered stepped in and as bit. the repurchases. a more stock done aggressive the our price And in

quarter. on well, should we just the during about that had late the cash normalized so And quarter, deferred a stepped accelerated more a sometime third including have which kind more million our in and quarter, still got bit of share second was going that in early agreement fourth settle sheet of an shares. to be repurchase to balance $XX the as agreement the that bit aggressively little repurchasing grid-based that more back But on little we'll approach we we with purchased

Operator

with is Ravi Morgan question Shanker next from Stanley. The

Ravi Shanker

it's who capacity, maybe you in of just cycle well. first So the peers this your Where is probably has lot ever. as the not but a while, a up excess do

remarks kind do than that I have little capacity guys? you you excess on looking capacity your a bit to their feel sense earlier they of that similar Or of to to is margins think alluded approach well. a you in and your prepared drag kind own? with Do having deploy the may incremental this dealing you that as to that be

Adam Satterfield

looking broadly, do I be with It's than any what at capacity, going Yes. were industry that any any we're the -- to has. for industry a capacity-constrained more to of excess going answer But carrier individual like to measure just we they're can't with I feel respect previously.

back about probably go be down number estimate you that back the operation capacity at yet, more have are And of and proceeding. XX% If volumes settled -- will the all peak are XXXX. we you of but that service shipping from XX% out look at in bankruptcy kind from that market. maybe centers coming least when in Not the of

that So they they were all to levels that and carrier, will picked previously. market by LTL shipments those to was come delivered the market. And the it are up back being our recover shipments, where will

to I we'll further. continue increase believe And

believe be share maybe gotten Inventory especially environment. service high-quality continue of that's anticipated other don't shippers for as growth see for carriers. higher market anything the continues curve. that our why to that in to long-term opportunities, more So continue ahead interest rate opportunities a have We to invest they've we changed and stronger look than, has we perhaps, operating focus, an with management

Dominion. to the and puts think burden carriers, high-quality select it better than shippers I none on Old there's

generally we than other improving an at had, the we've to believe as and positioned capitalize industry. any look on an opportunity strong that carrier we're and better market got we've we think So ever

Operator

with next from Wadewitz Tom question is The UBS.

Thomas Wadewitz

and to the I I you wanted -- but tonnage missed us think like I if give apologize shipments. I if July just Adam, So see could this,

July? I know think the about but to shipments. thinking if like I about or don't year-over-year, talked but July framework of terms shipments revenue tonnage not you want versus seasonality and June kind for give some tonnage us you in and normal

Adam Satterfield

similar second were revenue, a flux. And in growing if X% where the range. per standpoint this month, starting definitely comps of we day the pretty at -- week, Yes. rate quarter have the from that and part mainly like were we in of particular. is will, you The considerably, a it's I of were in kind the mentioned, revenue I breakdown, changed we first for obviously, this mean,

might a so there's out can disruption it's But finish. we we extrapolate little a month with what the little going mix to where and think July. numbers we'll we're volume those look, given what drastic part final cause And that think tonnage in and numbers that I change of respect flux look do of we to last to seeing We the numbers what to going in like saw levels be yield the business today. and

that be I point, this the and would a X% a probably And I would final then standpoint, could those that the with And X.X%, we'll we way just around what yield looking but consistent right in or minus at say that flattish, that. from see to volumes that second that, one where quarter. But flatness numbers pretty plus are little say land. about again, stronger, bit saw now, and it's

seeing course, a put as seasonality are would of day, standpoint is decreases in from pretty pure and just is otherwise consistent the But final of range. a at details day months per through looking we'll out go October standpoint, there. drop we revenue off a revenue we're what see somewhere And type that from be, X.X% month-to-month just and we year. and of revenue the the per July pure what And kind normal which progress though, with the

that's average been And has our what pretty with consistent X-year there.

see And So of we August, some strongest September, then that you normal. as to recovery we'll back pretty the know, is month is much get year. which our in look

moment. the and acceleration with August the that course, update going earlier, so. final we at But And stronger see We the that's quarter? trends. strong then land in kind a end as things of the with like July of mid-quarter I where can mentioned update, lay land. repeat, June. our hope can the And March, and performance we'll into of strong the saw if the of what in would So I we looking see we'll are performance

Thomas Wadewitz

Okay.

other quick volume thinking you kind you how when the are in keeping of Are bit of headcount On Just sequentially? flattish keeping And environment? a kind improves? sequentially? are for flat? volume a you down headcount, some one it we little Are modeling Or one. capacity about headcount

Adam Satterfield

we're I ahead XX,XXX from spot XXX a At day. headcount XXX when last were good September June, to per handling of we in end an overall think Well, of standpoint. we of where people were shipments the in we're year

we're in changes So how we alignment a And if balancing the quarter. the generally, through good half what changing. spot second we're they're kind counts our and continues just, in the occur the of there. so normal It shipment are that down with forth, year, attrition to and drifted go always place through taking as of second

deal be continue we that will So watch with. that and something to

of but truck this ready increase in versus coming catch-up But so into can are out continued until getting in much, you, eye yes, to of XQ, wait to it might once you when you keeping play people got you be for our year generally will. point, slower that's forth if with want we we're their schools be able the to you we position number always look where don't invested at be trying to like, this and for CDLs we're why you the our and And we ahead to driving our XQ it's we get to our so restarted and closer with be curve, get what customers call seasonally year, of at help have investing to and they the we and and reactive. and the need on XXXX employees part a respond us a, to capacity, and

Operator

The next ISI. is Evercore Jon Chappell from with question

Jonathan Chappell

pricing peers Adam, reason we were you to yield the do your summer, trends know as [ organic the especially it's as seasonal about capacity starting ] anniversarying XQ pricing. relatively capacity wouldn't beyond of by well this bear But in in think online, there or auctioned that typical been is and what of stages about any whether growth like to terminals bankruptcy yield relates may the some why consistent. sounds market? early XQ, the the as or that that It coming anybody in see has thesis from Yellow any you perspective, a whether other factors of most

Adam Satterfield

to expect. we to good yield Like we just I've maybe I said we're see earlier is elaborate that's work performance mean, that what by this day that, but on on and something and continuing day.

and pricing teams Our ultimately working all their sales supply working value team costing and are together our provide our to customers chains. with to and

and yield our necessarily not a been what of like? our markets increases that What's the us. of are consistent has is in obtain philosophy management cost sense to inflation for continuing But our then needs our market-driven looking business. the And worked not. or are in is long-term favor And that's a philosophy that

continue well. to as we move would expect And what so forward we as that's

expect I working and on through we that contracts and negotiating work due We're need are that those. and to obtain every day, coming increases would any will

whatnot, thus and environment what in on, a specific of carriers what industry other that's or regardless see So disciplined we'll and we've far. seen we that expect may areas issues to be going continue the or

sort continue what that just focusing we'll So we of and continue customer to to we value through supply our do manage on to what and add can and keep chains. deliver

Operator

is . question next Morgan Barclays. with from The Eric

Eric Morgan

cost inflation. one on wanted to ask I

Your digits employee up about so a has or for been comp per year now. maybe mid-single

outlook bit, we sequential measures start you to And inflation OR down for wage are broader Just little does maybe about see XQ? should another later a how as trending into and increase quarter wondering, moderate? as this the that think that factor

Adam Satterfield

will, the per overall X% speaking, give you it's that at generally and There's we our wage and and with over look include up the that cost in year our more those second when going improved you has factors, quality the off the our years we been. we've when look comp we quarter. generally employees what some to program Well, line shipment, programs X.X% which over well. the though, to as inflation health multiple term, cost increase as and in benefit if that time cost fringe offer wage group per improvements been longer that dental And like in paid shipment, to that you every about some benefits benefit we've of things the of experienced of costs well are and seen

So may quarter necessarily shipment with be those when program, the improvements and a would in bit program having just self-insured something terms volumes have in continue We'll incremental to changes comp I in offer what And you're of over versus reflect that changing. there's time, to we're the that changes manage. and our X in of mean, terms the But employees. on going variability can that's always maybe alignment health benefit aren't you we program that more expect. are next the change that looking we little

wages costs But are our XX% of salaries, benefits. and

term So per that's cost generally It's averaged over total our shipment been the biggest X.X% driver well. long as inflation. to the of X%

a been that problem for digits that few our up years inflationary So years, double that all costs is of mile a equipment, it. We've items, row. been the goes a insurance things the lot for basis maintenance into per had digits industry up cost have double that other have of multiple like on in a last incremental cost the

continue be we to things efficiency on of discretionary and that's ongoing got why those [ operating All spending. and with, ] focus there's an

day bad. and costs our by times good in And we're day managing

you until wait times. -- If they're bad late it's you too wait if until

you where going not start. know have day You've or to got even may that to focus every

know, And philosophy we we're our offset those XXX something over looking achieve that's XXX spread try we you then to basis cost inflation points that inflation to yield cost always metric. other positive how that all of of basically costs So to can in the management top keep is check. at, as

our keeps with pricing that check So rest the well. of levels industry in the as

all as So it kind cost it's day-by-day as our into of a but keep to minimize inflation try we to goes can. fight it, best

Operator

is from with the Susquehanna. Bascome next question Majors

Bascome Majors

line without so seasonality signs to be stuck both do a above try of far, you your Adam, frame our the XQ as basis, encouraging with will with set to Can and appreciate ahead and [ into on XQ, top top have But typical back it's margin to or some July we looking suggests views? level market hear the whether ] we look of seasonality you framing below. seasonality blessing and for side. historically margin necessarily line the XQ, business through how

Adam Satterfield

Yes.

times, on of standpoint, average first in quarter into fourth just couple slower X.X% quarter then is X.X% first into it's third are the the revenue off and quarter. a fourth a just you seasonally day periods, fourth versus go drop slight the the going quarter per and pure if the said So then will. down, a the The sequentially you first maybe and about revenue and quarter, you drop down quarter, from quarter

change had the year go in years actuarial we one view normal XXX XXX operating they the an is line. revenue points of other. about reserves basis a that or last wage normal than insurance insurance third can ratio way higher have quarter that From to a And year, lot that increase. typically always bit. adjustments. generally that our fourth I X was fourth level item that of is. a got remember softening change, those prior, as unfavorable is to from A adjustments favorable quarter the the adjustment And We've few if been to last reconciling and the months standpoint, an and whatever little claims assessment you and of those

that kind cost change. So the window throw out that progression is at when just looking normal of of what

Operator

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

Ken Hoexter

a check need bit. I to guess maybe Great. I little numbers

we've got basis a point a or XX second quarter of point in basis think third a not I decrease. improvement, the XX XX-year average quarter

the teens wanted double from year, given just day And you should on data, down we revenue went per think about day tonnage quarter mid-teens backdrop, to fourth to about the and day freight day the as that. per to into guess the third tonnes half we yellow you as know lap tons upper I -- talked lot you've losses. market per third check the per kind last then growth? we into move smaller of I do but kind the how how start shift quarter of much I and So that the back think of into revenue a per quarter? about day,

Adam Satterfield

to back come I'll And Yes. that.

that. address just me Let

third The change. quarter second quarter to

the to then us and XQ basis reacceleration to the cliff XQ COVID business that it improve but XXXX are we the from of year, allowed points right, point math the that of was levels. 'XX a You're that had is that skew similar operating last of a had acceleration there years XXX a obviously, change, ratio and more XX in then where basis in you pure about couple major happened the there revenue in

something going of typically I normalized unless at a kind when look more that's we'd what drive change would expect got you've So that unusual there. on just of some progression

we the mean, acceleration to -- last With respect was year. had as the you that and happening shipments, tonnage obviously, said, question we're meaningfully I

we XX,XXX recall, XX,XXX of December shipments If and July stepped of up from XX,XXX per in 'XX then through September. were further in really August immediately and to day you accelerated about to at 'XX

the step will. really well be was change happening economy, anything So that underlying with you would function above that if

type can So is like standpoint, some will, a if from increase and in August you about a to just if there acceleration, from average X.X% XX-year September. increase X.X% normal we then July see our of tonnage

we've and what at think how relative But change things have what hit year-over-year So you goes. we look normal than just far like through be at so seasonality least overall, achieve now, more negative the would July. sequentially, what But maybe would those it look would so those, right we just see volumes. you that can in challenge I if it's as that given even to is seen we'll

call typically just, up but from quarter it, gave From pure numbers day a just X%, earlier, were just we the We we're that sort about up of in per quarter, X%. rounding and a average numbers. the tons X%, second is standpoint,

half of what So we of suggest. kind up were normal would seasonality

So we've and up got lose little business bit ground. said earlier, we some always in that's of a make to normal. July I Like

August at have into can see little we were September, some we acceleration kind of almost June a period. then acceleration and if bit through so of And normal seasonality the in

the the you And about quarter. adjust Friday, we're seasonality for at March, Good got of those growth thing same in months with to the stronger but

August downturn, of September, I positioned sense the So if and some and through we'll I month ourselves operated. economic well. we're true guess, then this XX% acceleration in think where every at terms of and of some out operating that take basis we've Whenever essentially XX.X%, see make progress be I for we can come point should we've strong okay, credit we we have in of

costs overhead to within that the look But from just relative our have the costs, that with overhead gets direct when I'm operations breakdown and to in primarily. of But cost management that costs into our ratio standpoint with then where we the quarter. is everyone ratio. down variable in quarter our operating our I direct of recent increased, the revenue and pleased are improvement overall an XX% made to And to the XX% at past. really been field we've around the in our contributing Those operating day-to-day the in have XX% most performance

to a our and system accommodate network, we've day. So XX,XXX true some more density our get once built network back the into than shipments we coming

model, were XX,XXX, move in power that with back in scale number is, where in we So the into where [ density whatever XX% and to you'll the us it that's back see with towards once operating really handle XXXX. OR of from you the XX% XX,XXX, we on -- X back XX% get back that XX,XXX, an puts that ]

managed in when in great and that we has this back. certainly the very capitalize are market seeing a economic some we're a on actually position downturn through ourselves start think well and great I to spot put have wins

Operator

JPMorgan. The next question is from Ossenbeck with Brian

Brian Ossenbeck

competition you a the as on would markets Anything these quarters what in into to Does half new disrupted X Adam, coming looking kind year? maybe the that March being by more ] your you a on Is capacity [ there come at cost? competitors? that? out the So facilities more elaborate of you're little and back more strength being of some of that June. those of can then Are follow-up last of aggressive give pricing end call to you forward some online? you service maybe any year or little online. from another bit And doors they customers extra seeing either anything next the some it of or capacity Or to not and and bit read to and back fill maybe sort anything just are of necessarily seeing end

Kevin Freeman

a top doom all gloom. of your is I'm not is lot there our out I'm going and This involved the Marty. with answer to customers question. customer still heavily feeling and

In mid-single fact, XX our customers are digits top year-to-date. up

they lot our positive And as a of remarks, see some especially customers. getting things we're year. rest So of from positive larger the the well for

drops think those and if positive said things as very Adam of feel we're And towards year, the we earlier, the So end interest can they continue. accelerate. I I see feel we'll will really some rate

to forward prepared that to looking and we're So handle it.

doom it's all trust not out and So me. gloom there,

Adam Satterfield

any to type in think, consistent not if material continue whatever of through change has just yield with in That's continue be center someone competitive market, the service our our I in X side, and manage see Yes. you we'll performance. trends, seen, sense real the And any can things and we've something monitor. opened of don't as on impact to

little -- those is -- customer market And that the reason. down having about from of as the a into and many overall, we'd these to out be those cost something the end I market out recover. referenced try that's it's centers that reps XX% and that in it surprised down But were aggressive existence to But purchasing day, of for had serve at we a went to that someone and be that there's to markets see And going shipments a I given up. They earlier, mean, their the are XXXX. particular back facilities, base service called will LTL in from and the estimate fill sales on, there.

opportunity of us, shipments, maybe think continue to But an Old an for LTL will creating those through the end even you to if will come needs refill general, those will, industry in be creates it to LTL more online. network. me, And to moved Those opportunity specifically. once facilities, Dominion they that, for customers I that up that for freight have

Kevin Freeman

There's over haven't that facilities I sold. XXX agree with that. still been

YRC was that's less we So pick when still up actually than in when business. things . capacity had

Operator

Stephanie question from next Jefferies. with is Moore The

Stephanie Benjamin Moore

of terminals have I so far the network wanted your bit been year. that of and some maybe a some to touch on opened investments this

or given terminal if of sort there's new thus helpful. for update there would in then back been postponement us maybe of half just plans year, door update you the macro. if maybe color So an pause openings an underlying on the And be your Any or additions could state any far. kind of this year-to-date maybe give the of terms of

Adam Satterfield

CapEx and component on execute on to Yes. this million this year, $XXX year, least about current real that is We've opened the service of X our program. estimate spend to The plan. at we're continuing centers estate

network as So our comes be, centers play and plan over the efficiency some And service capacity. look what the is, kind we measure look that X the like may we the when look at network, we growth facilities feel where location years are. well, of the we of need the at these the curve into anticipated of next of

It's a unusual we through to of environment And heavy overall get bit And when go not slower economic into plan. ahead now, we're the little little a right so the a goes curve. frankly. of that kind

and that's is system. today okay. XX% long-term we that. Our We're like XX% to capacity with having We're XX% strategy about excess in comfortable the at

Now maybe today. what there may in facilities is process mean are said, you what exactly that that

those finish will facilities. We

open And the opening facilities, the dictate load the to happen. and impacts line and configurations to haul immediately, to that overhead operational. justify those those there's and forth demand they're depreciation go stronger the And environment just doesn't wait we until overhead, with the along so we'll construction. start network once really ahead finish facilities the that if them we'll negatively that has factor. there's the goes of incremental that but Not all generally, cost but demand We'll

carriers another there. facilities multiple the there, opening reductions or why are that So anticipate pricing that other these which any in is be pressures that's facing don't incremental seeing cost reason will something we

the it, that investments evaluate. are in continue overall, that we the respective continuing just we'll of to areas. look -- really we something and each goes plan opportunities based that's But what continue market and into and share the So to on just to we'll think make are

total feel our continue the on fleet thus, tremendous And then our real spend expenditures, intend so got estate and we and opportunity well to every we've the revenues growth. to XX% keep the capital we with as year of to obviously, pace side And anticipated ahead. on technology like to XX%

Operator

next is from Chan Bruce question The with Stifel.

J. Bruce Chan

with to wanted about customers. the with I macro situation side on geopolitical parts moving comments, year XPL talk seasonality But and discussion certainly, lot Adam, Marty, follow with the on there's given the and the pull the election. your up obviously, forward. of There's this volume a some been

customers seem So you've if . wondering, gotten right now. be pretty if to in seasonality maybe any from just to clear that think demand conversations indication effect or you the

Kevin Freeman

top of the them is customers part, for that I here most related pyes, us as handle and said go new was come XPL are referring about in they're are giving in of that opportunities the their with to basically business. And those most those X/X And business positive. before, super I've and to. our

and super they've and to, opportunities. growth set talked have morning We XPLs positive that got they're in here I've this a already of

So well even some I be some as if hopefully, that see from And we see there, the geopolitical will we'll results I'm positive. environment positive positive these in change next it year, customers. more think

Adam Satterfield

add. to anything have really don't I No,

election an year we've creates top overall puts this obviously, that a that, think pressure of seen uncertainty usually the environment economy on I in on slower, any industrial and year general. and time that shipping there's

and forth, factors businesses we helps and consumer. will whatever their that rate people uncertainty expanding owners think be I of make that the still more of helps put think environment they measure having clarity interest that macro just on we some bed, to soon We're a that's that are decisions will from start an the business economy. But if the goes. it one speaking, consumer-driven just changes direction So so something be and impacting about I broadly and make can that

the healthy we to to a things picked for creates got that's inventory out into so and that keep something that's consumer customer be shipment that And OD be can that a comes that's if replenished there, buying they're up. call

be So will opportunity created. that the

measure that had -- about But a improved something kind quarter. now. second the performance monitor XPL forth. it's was we'll continue reflects in the our ISM stronger, seeing that earlier. and customers metrics So and Industrial we with to so mentioned, but little industrial we're bit performance like Marty environment the as talked retail-related of We right we're okay

it We've in caught a for all down the a been to a down anticipated. that. in lot of does. turn that, I to part part at for managed you're positive the than it's the a when when But easy capitalize of in originally and to the called some get through the had cycle. position it's longer we're reason. of will We've But point, great cycle And back up cycle it

Operator

Jason question with next Cowen. is The Seidl from TD

Jason Seidl

Adam, thanks for squeezing me here. in

Marty, some comments. follow your Just to wanted up, to of

that? You consumer it's doing? those of we lot business wondering the big mentioned here. XQ about forward how customers into And was forward? versus not a spread Is and look start that you've one this and other that been from season Is have industrial? guess, And seen XQ should a lot heard across talking at to the more this gloom. your all and of impacts areas of sort the I some customers, you being doom what board? peak we've from if be, going I wondering pulled guys any the I'm would

Kevin Freeman

or a all commodity a over standpoint. the from board Well, it's product

that on are the It's commodities but sector, these daily, the see board. over just all your XPLs board. have the you and the and over all inventories industrial are up from The markets customers. ones news the your we really travel hospitality the that's As other and over opportunities

and You still getting inventory overseas. ordering so a last others we going domestically product, be we're is to from or have whether hear from little say that inventory our low, some that say, year start

-- board. out, very I'm better positive So it's I'm like basically I'm the forward still all times. have bottomed But over that just earlier, looking I said to things and

Jason Seidl

Okay.

any the of pull have impact? terms seen In you forward,

Adam Satterfield

whatnot any sales we've least at customer this material that... that I've of or team forward in We've point our or at not really or the anyone had any any heard here that's heard office spoken not from pull really discussion to

Kevin Freeman

X yes, me either.

Operator

Jeff today Kauffman And final is Partners. Vertical question Research the with from

Jeffrey Kauffman

your look for Marty, bigger squeezing down ATA just last I'm X%. a at I about the curious it's year If And Thanks picture LTL me view. tonnage question. here. index, ago thought before tracking X% of were Since publicly to carriers happened, Yellow, kind more to that. is showing the traded volumes flat the closely of traded Yellow up the publicly tonnage. LTL group

And ATA X%. the down where and might tonnage larger me be on your so there bridge smaller than help But gap? there you index peers. of Like the this of a why going is showing you struggling is kind carriers more maybe still LTL diverge going about would little much? on? Is it something some bit something Can

Kevin Freeman

some rate. some of to large moved customers companies. the move basically, when some it, freight freight of freight you forwarders, any lower so some has went what And assets, smaller probably it think out of smaller saw that to where those went a truckload that And portion I gone. that but guys, they're slow. that's think have I logistic it of business carriers struggling at is And went started ways think business in not as a I full economy were handled Well, YRC to find and that to of to forwarders, of air your don't

to before, the to will carriers industry. ]. that some gets of to freight the towards relates industry pick as truckload will get that And as stop that halts LTL back capacity said -- carriers up, their and begin benefit freight from industry because economy full from And saw truckload when I've those the starts your full LTL full tighter, truckload it even busier those your we move [ move back to once

price. So the I on business -- bit everywhere moved little think that a type based

That's only And can explain so that's how way the it. it. I see I

Jeffrey Kauffman

industrial. X So point lens in for publicly just to weaker truckload look territory we down business, what chasing When X%, of reporting kind a broader probably X in be XX%, companies now, and a any bigger growth appears at industrial your we I'm the traded growth lens Yellow the production here got not the mentioned and guys. the through as is of you that the negative right actually aggregate X% than traded flattish at is publicly XX% stronger PMI is you're it or the earlier, lot look that, is, tonnage you going industry industry of are not than if tonnage the

Adam Satterfield

access to have Yes. But hard we I everyone it's all think carriers, will. But think some the as gone just economy. been that you may don't said, has Like you have the I we slower know private facing there. to mean, if business of challenge the of

hard compare are business, And it's so and revenue. industry's day to and quarter trace which numbers carriers, to traded look looking through that the comparison least recently and to XX,XXX them 'XX second 'XX per the did Yellow -- the of at most at first the just at, XX% for when I XX% publicly you shipments did the quarter

the move exist LTL sharing I and in the a cost out moving But But our all for shipment being take environment, trying made shippers they those they're the long-term is, within the how by mentioned where all their it creates, think, earlier if sizes thing and opportunity handled went are away shippers LTL the carriers to what benefits sharing that economically, on the of environment, being smaller shipments within mode -- freight which with to trace for handled other leveraging industry. we cost through task. by and that what tough is figure network, sense LTL an freight we the

are available again. shipments there and and to be Those going return, they will

knows beyond be to number But like XX% the we'll -- back grow We'll And I we from could one total period. that in why believe and believe an that's at continue we're at more that will 'XX, even get increasing. so or down 'XX point, there. industry in it further we be. looks levels were the to we our were industry with And we'll where environment I think end final who capacity capacity that where maybe this what up be will

volumes there gets still and be shuffling a And really you've those shipments that less little with again. ultimately more exists. may everyone around and once tightens capacity of busy home So market bit the and finding a up got overall

I you'll got that's when the capacity, best got network best really has capacity. long-term the capacity, see value the strategy, think who who's people, best service, equipment

just answer Dominion. Old I think think clearly value, the when all best the at you those factors who delivers and is I look

And about are. we're will why that's long-term think create continue I that ultimately value. what share we so And to incremental market excited opportunities and our win shareholder

Operator

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

Kevin Freeman

We us have you you good Thank and you a day please all your of for questions, I participation your feel your have if good and a rest call free And appreciate anything give summer. a today. further. to Thanks. hope

Operator

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

may disconnect. You now

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