Covenant Logistics (CVLG) 21 Oct 222022 Q3 Earnings call transcript

Company Profile

Participants

David Parker	Chief Executive Officer
Joey Hogan	President
Paul Bunn	Senior Executive Vice President, Chief Operating Officer
Tripp Grant	Executive Vice President, Chief Financial Officer
Jason Seidl	Cowen
Scott Group	Wolfe Research
Jack Atkins	Stephens
Bert Subin	Stifel
Barry Haimes	Sage Asset Management

Call transcript

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Operator

Welcome to today’s Covenant Logistics Group Q3 2022 earnings release and investor conference call.

Our host for today’s call is Joey Hogan. At this time, all participants will be in a listen-only mode. Later, we will conduct a question and answer session. I would now like to turn the call over to your host. Mr. begin. may you Hogan,

Joey Hogan

everyone Covenant Welcome quarter Group conference call. to Ross. Logistics the third Thanks

to conference Securities everyone, forward-looking reminder a As this the of of Act statements call meaning the Reform Private Litigation XXXX. within contain will

publicly statements quarters four operating XX% margin, share diluted for from XXXX. with share inventories earnings negative any quarter pressures, industry-wide prepared was adjusted recent this limitation statements in Investors and to could quarters basis, joined trailing consolidated on contribution growth, share adjusted in was ongoing actual or comments from Parker, XX% up teammates XX-K XX% that We per trailing grateful SEC, filings Form of income events for those growing by resulting with by history. the the revise Tripp compared at results we on up overstocked record and major over available repurchases. update Please our our financial section. circumstances. statements. without I’m our and from cause the materially the flat combined on Grant. David and for the subject Opening forward-looking to current additional and was risks the website differ for or earnings review of our challenges the Forward-looking increased section capital now Form call, four is are any XX% remain growth, overcapacity that inflationary no producing to reflect for contemplated reduction count in undertake a the morning despite uncertainties Paul On a in most call Risk and strength to our per Factors of to recent months, the our the share Bunn, GDP and TEL, adjusted on forward-looking have with including A Return disclosures XX% in and our XX-Q. revenue copy our third adjusted subsequent www.covenantlogistics.com obligation net

side, we other quarter, utilization the the and deliveries held new parts, of margins our in maintenance items On pleased our second costs delayed impact compressed the of sequentially escalating of line were equipment how but with and the rates truck quarter. and from

freight additional provided TEL, managed a AAT The contributions shrank holding stock with freight and headwinds $XXX by a group margin warehouse which our of quarter increased quarter; to our team reductions side, market to operates business repurchases in the our from historically did weaker overflow warehouse strong despite the Our for freight improved acquisition, earnings share associated market per Dedicated, economically job in great future capacity customer most investments with and in the cost and withstood of compared new year sensitive in the growth. the grew of the revenue summary, a market, a million less third despite were: adjusted freight and revenue of $X.XX highlights to the grew from asset-light to In share quarter combined segments X.X% to fewer third year per our XX% warehouse ago XXXX the share managed XX XXXX. XX% X% truckload’s the revenue versus quarter per quarter; XXXX compared key of trucks; freight freight compared the ago. asset-based earnings truck

year record, insurance increase prior Gain accident in to $X.XX last of number DOT in ago of a year, On XX% $XXX,XXX per lowest of quarter development than was $XXX,XXX claims our contributed but rate on side, sale safety the was only expense. the on mile third to compared lower third period quarter. quarter the almost small

to our during per by another the cash of ago additional decreased shares ratio through We the the the the quarter. versus We California of September debt with another produced in cash to a times, contributing quarter year year. sale invested X.X%, for quarter, Due record strong finished the the of return total share investment purchased an this $X.XX of terminal, share XX.X%. company almost million XX the net leverage million again utilizing $XX share or $X.XX and flow X quarter quarter, on leasing ratio TEL bringing repurchases. Our indebtedness a on $XX.X to capital X.XX of million million equity and after per

bit provide more items will business the Paul color a on little Now the affecting units.

Paul Bunn

Joey. Thanks

while warehousing, has into business, of side XX% of trans comprised the XX% expect total environment. businesses, softening of believe of asset-light a revenue adjusted the our quarter, managed we consolidated operating revenue and stabilized, and managed freight were the compression we In For freight profit. margin

Our to the year, impact the impact receiving the startups of warehouse for stream third revenue revenue full quarter. three has the accelerated in due

the strong trucks, a was headwind XX% We and quarter in for quarter the freight were The acquisition the expect to revenue the the The consolidated contributing between stable feel costs from but operating quarter, and increases quarter. XXXX. ago revenue of improvements in our was an now adjusted operating for costs goal the was on per dedicated unoccupied The profit missed equipment profit operations consolidated and grew growth focusing revenue progress freight costs the lease nicely. to eroded costs sequential with group margins. mainly maintenance of OR XX% the a We margin in the It quarter, present maintenance costs, peak at growth was year. increased and on perspective salaries Sequential due priority cost growth, major we quarter year quarter insurance decline some and week fourth the revenue XX% truck continue per talent wages, our equipment in of remains maintenance to quarter. in maintenance Revenue the XX% of per time. division significant and revenue during quarter to growth and pay salaries replacement costs startup division and to and and our while first of versus due our to in XX% quarter. truck the the cost and equipment costs improvement asset-light remains acquisition due end a improvement. Increased third enhancements. versus ago and be XX% Driver improving wages, aggressive and plan of expedited year adjusted technology of XX its on

accounts. continue upgrades improve We of more in margins reduction the allocation to XX to diligently and quarter, fleet work to trucks reductions, a profitable through equipment approximately asset

by quarter, increased at to Our TEL XXX the receiving which the million trailer minority more quarter investment X,XXX. X,XXX $XX than quarter grew versus fleet third in in quarter investment produce fleet during the both and XXX%, trucks revenue positive and included its is operating TEL’s to its ago to other the truck $X sheet, strong TEL, year continues and pre-tax results. TEL in by versus profit in in XXXX. million. increased of in distribution our grew assets remained our by balance a XXX consolidated After XX%

TEL overall year earnings equipment their on for part a to quarter. focuses trucks of the or As leasing equipment small purchase a can to a Due and lease results clients, our and losses ago disposition fleets procurement per sale clients TEL to a business from robust cause gains contributed and its through an of programs management buy, program. equipment shippers, model, and to the and versus sell of trailers managing in aiding business reminder, normal total the or fluctuate quarter. $X.XX on share of additional quarter to $X.XX the is and

I’ll call back to turn Now the Joey.

Joey Hogan

continuing of the quarter, the future, availability, we $X.XX Regarding to share. our remainder said year and expect third full release, fourth adjusted freight bringing in expect continued moderating earnings driver we per to the share our per to similar although we the demand, inflation, outlook cost as to do include be our for year the quarter greater approximately

and resulting continued contract XXXX, of we safety headwinds economic For insurance investments well casualty volatility will sales in specific believe based inflationary team, equipment softer our have as small company weakness. earnings the during on than market plan, there acquisition, in factors be pressures; the – a however, from we we share made our renewals reduced from as the costs periods improved prior upgrade less expect results, repurchases, market

to base will full a expect predicted we strategically in Covenant, our XXXX confident remain cash five generation, be and to capital last our heavy we allocation leverage, our equipment our plan. shifted low provide and through that industries years, available that liquidity cyclical year, the opportunities logistics benefit investment shareholders. Even quarter range for last with year We Over customer a breakout of focus. to less service has been full the

for Lastly, able humbled to the and we’ve we’ve I’ve ever to years team had. the best assemble, I’m XX been serve been that about honored Covenant leadership excited and

a great hand new still leading time We’ll to open I team whatever the the under Ross, prepared with can in to our it next years, generation comments. Over assist the David’s done go. and just and for retooled company leadership, Paul around let do to has up we’re model role. the been will them now reins do help. five in questions. It’s to his the I’ll be the last job

Operator

Jason Cowen. first [Operator Our instructions] go Seidl question comes from from Please Jason. ahead,

Jason Seidl

that to you maybe morning. above Is volatility volatility a some [Indiscernible] $X ’XX. it X, less Obviously in little for good impressive commentary less Thank comment? Can is quarter. about around this Wanted bit Can put numbers you barriers everyone, put you of Guys, talk you bumped the Hey Operator. X? around that some year. us? above

Joey Hogan

trough as think know, in depending feel the You and guess where to said where the be is, a some or for it is and know if we’ve you it, point XX% and we I will peers XX% that. reduction I but peak-to-trough, look peak third we’ll you on that, some can peak-to-trough of think we it, second probably at know our that a where quarter you in look know to back same reduction, adjust a and thing, have is row still XX% peak and we so Jason, the XX% of and at confident this and probably said range is,

spot. good a that’s think I

Jason Seidl

on? to talk dedicated guys that changes the bit here a more to more guys lot last have more about would traditional, to Okay, type of sounds touch either Obviously made out Wanted months, pricing fair. you a up getting is you left little to segment. the the there, over improve What the change to business percent XX or business. like XX profitable

Joey Hogan

say working X,XXX, trucks think there, of I in process. and a on, that in continue there hundred a plan that would we’re the and that trucks are X,XXX Jason, left the there’s steady we’ve trucks got those are I couple for so we’ll actively

Jason Seidl

the [indiscernible] hundred going Okay, trucks forward? lifting heavy which done, still of but help some will you most there’s of offset a so the couple

Joey Hogan

on issues Two give The trucking start lot the maintenance some the effect this color to get some one having diluted the of all weed-and-feed. age not things so we’re more and of lot the operations our a that of and I little of carry that bit it’s of would in I’ll a equipment, start excess really and and maintenance we so in we’ve of I say, comments. equipment combination of newer of and progress things and costs think coming seeing that, fruits fleet as you’ll the to down a a here continued made,

Jason Seidl

we next I to able Where then too, my of bring to year think ’XX you’re you in terms two in ago. at tractors, age should it’s Yes, your ’XX? you a and that be to about and down going capex to, years that X.X look how about was in be when now of versus think your going think average guys, do question

Tripp Grant

of number, trying months or down. fleet think the Hey X.X going get in the I we’re end months next down come to QX, age about by years to that the starting start you’re XX so the year, XX to see average Jason, to of

We’re each year that we’re this really--we see next be scheduled in months, about quarter down plan. to XXX decline replaced year. and quarter really XXX got but aggressive said this trucks so gets with trucks this almost that the to you’ll being to We’ve be replacement sequentially scheduled call, it last year, next XX replaced about

aggressive to and buck equipment majority going capex, of just is capex, we’ll do say that replacing it will replacement would going bit XXXX lot and those. also continue $XX this been to going be of doing of little so little We’ll year lease thing proceeds probably net of turning into say equipment. owned year terms the to our but on in year. we’re and to sales throughout the that in turning on get a year, tail a better for we’re this capex, of In operating as we’re a being throughout a the is getting I’ll million next million owned realm we’ve what be the bit, bang to equipment, be The $XX one we’re I of assets, but net we’re the

Jason Seidl

modeling gains So sale be should next on year, up? we

Tripp Grant

Yes.

Jason Seidl

turn the Okay, the Well, on to congrats perfect. person. quarter next it and I’ll over

Joey Hogan

Jason. you Thank

Operator

Our Scott from Research. next question ahead, Wolfe go Group Scott. Please comes from

Scott Group

are Hey, What’s year? thanks. curious, just year? Good per mile you in realistic rate a morning thinking drop about how into guys. next I’m pricing next

David Parker

as a your not answers don’t and Scott, be care to rates the where think had solo said, because you? existing, or SRT side need so think let we to more as off, and out go as take year downsized pressure model. us that’s XX I to saying, the I ’XX operate take into are side, not Customer, XXX I come you I’m right really you is from, pipeline on I and decrease, couple and know, of dedicated the next - business we’ve some with. as dedicated to the you we I said a we new--not of we expedited going and us long don’t half of much expedited in new need from. think it’s is we we like going do XX% the enough I really it The whatever here last the concerned that there really But in necessarily that that I job when dedicated, said, to long existing and that dedicated get in think be that is we’ll do and long a strong trucks they there. need agreements are all let’s one with for customer we with has is the the blunt have that that great it to be. ’XX, that agreement see first. with rate when over need last these months, customer you want trucks, would side, reengineer we’ve to in buckets me not with agreements we take can’t on kind not had accounts Then don’t, term of did know expedited to unless we pressure to into customers one thing took pressure customer that you we have but will find near-depression also numbers. have tell reengineering customers. expedited come about is, in coming the Mr. of and have only trucks here going pertains both to one we like you the far and conversations because--you ’XX, on But the year, business, to freight, us If when started teams? that XXX need X% don’t cost you with in on you there’s is in you the and want ’XX being don’t our now have done XXXX Again, it Keep the back mind I we in pricing. six years, and We I of the entered will into be term where That’s to our come enter I need you XX. really side with these, because and I see a it

has So extremely that out well. far, worked

I to because you how I’ve negative as that got what relationships that’s give think percentage base, it’s possibly I a recession. here but could when it years know the have said, customer didn’t I that don’t I negative be I percentage say as could is, a say be I pressure, know customers. I’m there’s were tell ago much our because in we’ve our got X%, going going of magnitude because been you into good the with could think So confidence a we to I to don’t what X%,

Scott Group

So going market? to your van hold maybe better is than broader you maybe think up expedited the

David Parker

loads. pressure our customers I think air have going oh, are, because I do, to loads--it’s and I expedited, whoever our don’t think freight them, Covenant, you’re getting going but need--again, freight, really to both I down, seven I’m be, split of My seven you XX dedicated do, of I I yes. have it and I you. is between don’t need not them. all is XX X,Y,Z

your seven. getting You’re

may pressure replace going to loads, extra cheaper right I existing and through to think rates be that business come at, that’s that have think there, I and three where hurt but is tremendously. we’ll don’t we’re our those

Joey Hogan

perspective you the at better and I that understand today people expedited historically, about past, in you’ve the we right sure, make next what position question its say, much much and months us answer and past, what is questions, for look will different understand than to to we’re in is so the I years, what for we not had to is and then of is today sure an expedited quote, what albeit six, feel the very pricing. eight, and want you we we as, would and at just one team is just was services. is and you highway which We historically, past had Covenant lot chapters solo mixture add was Covenant as some team, thing had the when you’ve of what for a services than that for that in and see Hey transport so where now different Covenant or team Scott, look transport apples the and it’s to that solos, the expedited some David’s nine - a volatility chapter understood highway try seen its apples trying dedicated, seen as

Scott Group

at, Then $X at $X you earnings that million, million, equity and we’re that’s million, $X to million, $XX from the question, being that look $X similar what going Okay, $X million, very be lot know, forward? market maybe I just about like, million, a than earnings million, stream different, is--other the changed then, now so going TEL just business, what’s when durable - more $X helpful.

Joey Hogan

the three, systems the but them outstanding solidifying I assembling I just a think number on two, the on in work think they’ve years, team, what Covenant, Covenant some team, within collaboration It’s really it’s the what’s overall things, of years, a A, done reengineering five only Number happened you’re and a five units similar done It’s in six that’s he’s seeing. one. done and last similar leadership the across Scott. Number pricing an several which businesses. job of of lot all to business not costs side, or Doug TEL. and phenomenal dial helped is lot producing results. the leadership last coming together has outstanding side very the to his--he’s

Paul Bunn

Let add Joey to me what said, Scott.

it’s two think I things. other

XX basically been but chapters, OEMs you are got to--you you’ve you right out to fully worked rationed system, equipment, of trucks If on back I’m some out they tail times, really ate today, just a making gets of grow. of five else’s and an and XX you decision with down, the and add of next the massive In year the to lease were on truck, and in had growth times take--Joey is other where trailers, average have costs way a so right so COVID lease a go it are going them them years, good you kind to more trucks and had that’s a trailers it a put and course the these in chapter. tight years, they money many so in it’s accounts into trailer, recipe and some that equipment their earnings then all and then about all catapulting earnings, they ago, a once they you’ve the is, having got allowed how upgrades the really it a bought of negative and kind of market to that digesting the weeks have upgrades you last into their COVID a buying months orders, were the chapter, trailer, were of made ago, three and hand transaction, played the of just months that call talked the We these a of part able pricing of so COVID supply and kind COVID and of truck, significant years, that continue transaction, three place going before them. few spree stuff. two keep up way years, we allowed during to before caught it, the all we them amounts of has a a decision--collectively to flat buy growing such lot a transaction Their know, but know everybody’s hopper, lot--it’s equipment to customer that last and a made they to all when to buy that it’s get chapter has been ago, and

Scott Group

to--oh, maybe ahead. So go just

Sorry.

Joey Hogan

model, Scott, and their the they view B, add, Credit to able well of rates, to unbelievable, market. far, that of - to through so to pass I and obviously quality team increased important so do just do no is on leverage because of a question very rising. would that that’s interest able capital costs, very, in Then depending recessionary the a headwind that. credit the some able pricing - costs, or quality is it’s would market, what’s of model, also, are both say that. I a do a so leveraged past, accounts to equipment because have for with the used own time, they Thus as so being model, in strong who increased of they the to of in it’s how their and the their capital base. through job structures that’s through, pick pass as have group’s rising part they able their lot they’re are to be these are out there’s a in do able customer headwinds rates they interest done as the do their But additional choose to pass minimize good business had A, really with they’ve a and

what things call those softening know, two you a would So I two are environment headwinds. in

half do We’re business to they’ve confident year, ongoing but see quarters. are things existing work it’s of the did they several Pretty got two those the coming we nevertheless A from is they spoken full through, have through can interest won’t already they’re lot putting second but until in EBITDA that, going first for most on this through and the of of they lot year EBITDA a year to to able that on just is is costs. equipment much it to effect pass gain into are market, this so equipment of all for sales next additional quarter. power in. move on of what as the books they continue business the grow,

Scott Group

to XX%, just to this year? XX% these up, that million relative how could earnings drop of upper you go? from equity do would much maybe down guess peak-to-trough, Where I comment $XX maybe earnings think wrap think you that do

Joey Hogan

Yes, XX% in probably I’d XX%. to that to think be than them XX% the it will less XX% I range. put

Scott Group

the guys, you time. appreciate Thank

Joey Hogan

Thanks Scott.

Operator

Please Jack. next Jack Our Atkins question ahead, from Stephens. go from comes

Jack Atkins

all a such to just congrats want say strong we and Joey, that’s best footing and Good testament freight that Okay, I today the well. as and career, you as a sort leadership, on into to a the great. of company recession, phase to your morning head think next to into just is of the fact as Joey the congratulations. your Paul move so I

Joey Hogan

Jack. Thanks

Jack Atkins

more of off, where maybe left guess kind Scott I one on TEL. question up picking

may think business, how of fleets some of about We’re equipment times? you large bit capacity. debt to that kind you turn really exiting some seeing As that of bad have Do we good TEL, we’re of some increased versus that just of really, mix coming off of there little about kind think you there signs a back early some be to worry book given maybe do of kind the owner-operators? or

Joey Hogan

say no, not Here’s to what would - I Jack it, significantly.

to owner-operators, to one bunch to they’re - not say of a captive lot they’re and thing model, fleets the owner-operators a TEL Here’s of owner-operator when so programs, lot leasing mom we remember captive that of leasing have and pops. in a

As and they business fleets one-off with ago, downturn, upgraded no those credit fleets those protect concerns. they so are on I I structures the do owner-operators said their mean, but quality with, during a minute tail, with so there’s this that last that, that and

lot list people the things, think On of but side a they’ll their to I’m quality. we they there’s and upgraded here credit fleet smaller back there, here. it in, that if few back take Yes, where and they’ve I sure a that’s a turn see major of ready of lease so concern equipment don’t

Jack Atkins

managing you’re issues costs this that, are how and I’d go inflationary love we office guys Okay, end you you’ve got also to got gears next as that’s cost inflation. great. service you about the How you of weighing are some maybe well, it love as opportunity and equipment mile of with inflation, head then but guys like, to That’s improve to question. some are thinking all chime drivers year? your about of with that support how parts, like thinking Tripp, on to per let got kind pressures get with so back and on XXXX? staff well, then one as regard into into cost you’ve you’d you’ve got fleet You’ve some and as in you if How great. run Maybe shifting feels here for minute, to operational we a you

Tripp Grant

seeing are things, is to Joey’s with in that perspective, terms we’re think headwinds. you’ve I comments, so ops an doubt of consistent multiple this tail. what insurance had safety QX, numbers, we’ve we think going no there’s believe inflationary and seen know, there’s What of kind of--you Jack, and lot back opening and insurance really I will. you if this in and of from major I maintenance, a quarters, in said quarters of Yes two I exaggerated good and consecutive think cost QX QX consecutive

claims, with in being as to we’re that get cleaned of be and pressure Hopefully a better of we insurance the continued costs But aggressive and the quarters things up. it costs costs and to You up into consecutive know, things fourth two to at on lot started control we a and broader we’re tying costs, trying as the position insurance is are would of correlation that so to to side correlate there’s the things the do can macroeconomic would we’re well prior we point, and now, going the have numbers. corner headwind related quarter ourselves things going you those period correlation like. between unfortunately for To as kind that of we a terms mediations, lot a year, into turn those we this in we of of would way. can but haven’t control, start best going XXXX, on try and and right can’t as to Joey’s think to some look that continue market as our we insurance what safety and to self-insurance see those doing seeing

big stuck side, another maintenance a and operational On the piece ops that’s out that’s really as headwind.

trucks of our equipment. focusing the on so or down dedicated, expedited creating of attribute mentioned strong part or it’s Fleets we of five in require a we’re because are and XX all We average that’s As whether that large to status, trucks long-term headwind are the that the fleets, trucks downed things so. control. can really age before, we that XX requiring those just across of now a fleet maintenance

is lean planned. controllable more and we originally being on things get that to than those of One aggressive trying tractors about talked in we’ve

recognizing around possible, think going to off older it’s to everything and costs the freight everything to XXXX XXX on those going to try were and or opened--I be to to focusing best get we’re a above we’re but on ahead the can so but be remember to when bring were XXXX softer environment we equipment trucks. and year what in and we tractors, I foot first for can the down, we to on looking quarter we’re which to was, start environment. new that allotted, as new doing think our going we it focusing or equipment can’t that be that, at we can things of next we we possible close goal Well tough XXX as XXX that will a now, we’re operating freight what get an control from so efficiently improve, hands our that standpoint doing

Jack Atkins

guess great question that. on get level in for of trading operating awfully balance with ’XX could going but last environment maybe challenging a between and it been allocation you moving more has capital items, you’ve on success. I time. the the AAT the how strongest lot there had pretty thoughts capital Then over think over, about as to forward, you M&A in I do your then into you allocating for M&A, those opportunities folks about you acquisition are I’d an are two great. next low be I’ll just stock’s sheet long front The hand a a a what guys XX think the love at consolidating looking Okay, so guess and months? for

Joey Hogan

be the I expedited it Jack, word niche-y. front, on anything would would niche-y say the you out there, or or tell niche-y niche-y dedicated, niche-y use M&A I Yes would could warehousing. If there’s I

know, are term Niche-y. I stable would track long - type a think good word record. use with just I niche-y businesses the you non-commoditized that

that’s looking let and it so has the we I think entertain I that got and and at dry there we’ll it, in think does. anything see keep out still like would just still repurchase working what powder share thing that, plan

how question. that’s think I’d answer I your

Jack Atkins

to non-commoditized businesses, for it. I That Really time, the guys. think sense. again great. Thanks I you’re that’s hear at appreciate so looking makes like

Joey Hogan

Jack. Thanks

Operator

Subin question Bert ahead, comes go from Please from Stifel. Bert. Our next

Bert Subin

to Yes, up. good say, know I’ve I Congrats not Joey to morning Go thanks, got and and so big everyone. to game in Paul. Paul, the room Dogs, he’s nearby, but coming Tripp’s

Tripp Grant

Say we can, it brother! while

Bert Subin

right, That’s right. that’s

people I’d I level know, sort of freight answered questions get your we’ve on you seen just guys have So and I think now and of be one, so lot interested think to that. for lot were is opinion I a you the this, think looking a of would far, soften, when high

last? what start starting and lasts. in of just inventories thoughts are this saw the context you just EPS? we to how and about is down in you’re than first improvement we have XX%, to any is Is may some curious long in out to second draw sequential scenario improvement that in this where long see it half, if I’m thinking but your extended be the focus think the half I you’ve to put how more by so going to about XXXX? to see curious you the going I’m - markers how for XX% some turn a this

David Parker

some we has of inventory. are that know, the happening, feel time, things the is up I’ll now, you restocking Well today and the we’re restocking today, as eight, is of the that expect get freight. couple think believe will that. that a give is industry a Board I way going told same that sign take ’XX One is we to in sensing I and right ago couple to no a believe that tell nobody that all which for today, be the for and trucking ways I there’s XXXX so do are and it. There slowdown is nine personally worse weeks some I experiencing months that personally in Bert, difficulties we it of it. I’d look it I economy me a we that We is--you what think is at continue, it. could tailwinds, At and got of know, couple that than I’ll

loads, I loads We’re not in load day load day, them of XX up sitting I load to and the today. or here the have we may saying, mean, XXX to which am so end way the XXX and we loads? every by feel that’s going how we

the March or and whether think eventually, start whether nice I going a in next is it So back, that’s be to inventory it’s truckers. September of tailwind restocking year, in for will

coming that hundreds two-year think is was were of fast today personally that how points. out into I it know and today many, of I think things some are came over the $X.XX helping the of that so for think time I a that trucks as and the been kind market, Those that XXX,XXX spot is came, as that we’re quote environment. leaving they with is marketplace, the things. when of freight us trucks period freight sensing current those hauling us of industry Those the none one sensing that capacity they three Another has be we’re of thousands, to would XXX,XXX

restocking slower can one in will eventually today, also leaving get is that would economy truckers. it the is next few start the than so the think help then day but and I months, capacity market, us

Bert Subin

you managed think good see out. that do like and the break just as issues? a makes past. freight Dedicated, Thanks saw there volume of for to margin some guys it on improving, that, pretty deeper provided of go sounds expect your to so XQ, it overflow probably side, revenue have sounds certainly to you starts headwinds certainly to the really there, diversify haul impact least start at helping that business and LTL you and When pretty XQ, sales line your in there, stream, it does is the the like it’s in has so like is AAT double some business, you little odd David. pertains have digit expedited to one Maybe than that holding better, you the the and we similar we that yield better sounds may some perhaps commentary it saw range. it in but

Paul Bunn

Bert, I’ll take Yes that.

see like will probably and than down where cyclical think I going three rock going trending normal back no is drop margins QX so start QX thing you think the that managed on spot in slowing that don’t think two more you’re but the from I There’s QX. towards our go economy to quarters. will QX probably be I think see the freight erode most, doubt to margins that is next it’s a freight, I over to lower going to

Bert Subin

you for Thanks Do back call inflation I’ll think been across and a or from that--I is showing it’s up bid Paul, that last turn is if commentary to couple times claw people the in the inflation inflation hit and guys in going season, costs theme around with other to that as your to you question know just going because a as to just just on how ability I highlighted shippers rates. you it’s me still it theme the but is this back have rate what your the Do it over, up is XXXX and use agree much calls. early think a have think in could and regards truckers know but contract your back is you that operations Tripp past, you keep as business? going in that to some take to challenged. that? I put particularly they continue comparison, ability so a any Do insurance have limit do to scale costs,

Paul Bunn

said what Yes, I kind of dead think of lines that’s earlier. David on,

drop-drop-drop. to None out of couple got would ringing of you’ve saying get or to just the year. them, buffer, say would I theme. customers met a lot week, are we’ve I, with we’ve increases next I this of and that a echoing them mean, I three week. David four that--I we’re is Between and think going they’re of with large met bell, that’s say rate another customers this

bit fleet for, rate the you more help a going what be Now hey, be they’re to right-size not cover as and but ways my they’re asking on coming inflation, monster know, rate let’s David Joey you efficient, or they’re said going find for, them side small said small, to of me increases to said decreases. little asking some to in and what are get transportation just - earlier, here

down. another customer with where you’re business and I inflation going to buffer with where think is to--it’s When going then providing value, a in agree that I you you’re to that’s going working you’re So a a be. rates

little in be service businesses providing is more And get back that. offering. do, that’s of we’re If a dicier you’re commoditized, kind think where to than what tried full to could that it I again, logistics we’ve value,

We’re trying fast to commoditized can. get as as we out of

Bert Subin

Thanks Paul.

Operator

go next from Haimes question ahead, Sage Management. Barry from Our comes Barry. Asset Please

Barry Haimes

everyone, a I much Thanks quarter. question. good so had and

have fourth maybe any that, heard we’ve muted other coming much so peak year do business that too typically it’s more thanks. going not this project quarters, in you guys a not if might your just in peak, run surcharges last wondering from talked and the much get and quarter non-existent, of anything may update is are coast seeing, on about from west how what haven’t side, you reminder, much an you season, on get the you or typically like gotten and or that inland, Just We just year? business trucking

Paul Bunn

what pricing anything? going peak Yes, year far going for freight to six the are for huge Fourth talking to in little this business. off to year here’s really weeks the lot intentional well or good the or freight? didn’t you purposefully especially we a the Yes, the eight customers three book. I try three XX Are for to to we a Joey’s to talk on lot to make we the year. things based the business Shippers margin David, the on a chapters get exposure be going of not--there’s to Barry, add our weeks about I’ themselves done so quarter, book, think do surge have are. year to back year, to year, very back going we’ve ain’t run peak, of a starting just ’XX, not not peak. tell the going was we peak, to last made we much XX Yes, four business, a freight to been and go back on? want going We’ve that? the ’XX and bit in it. your economy it’s point, just a the peak year then downsized Yes. doing of portion and if in going you or paid so But way get Is to go I we XX we’re before help ’XX, to have as be back. chapters - I’m to it it’s that have as similar you. of peak have ’XX, go ’XX, or ’XX, peak I’m and way ’XX,

David Parker

number That’s a now is of less peak right. $XX I about remember years and of ago, than Barry, we million time, four-week period would million-- $XX in do that

Tripp Grant

quarter. million $XXX a On

David Parker

On a $XXX quarter. million

Tripp Grant

Yes.

David Parker

with yes, but happy so it’s of customers where down That’s peak there, it’s there our at. it’s we’re And just to and two that. with very three customers, it’s old some or

Barry Haimes

That thanks. great was Great, a Appreciate it. update.

Operator

questions. there At are this no further time,

Joey Hogan

to Well thank us. for look updating call. Ross, I Thanks in you everybody January. forward everybody hosting for the joining

You day. a all good have

Operator

This concludes attending. today’s conference call. Thank you for

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