Hub (HUBG) 9 Feb 222021 Q4 Earnings call transcript

Company Profile

Participants

Dave Yeager	Chief Executive Officer
Phil Yeager	President and Chief Operating Officer
Geoff DeMartino	Chief Financial Officer
Justin Long	Stephens
Scott Group	Wolfe Research
Todd Fowler	KeyBanc
Elliot Alper	Cowen and Company
Bascome Majors	Susquehanna Financials
Tom Wadewitz	UBS
Allison Poliniak	Wells Fargo
Jon Chappell	Evercore ISI
Brian Ossenbeck	JP Morgan
Fadi Chamoun	BMO Capital Markets
David Zazula	Barclays

Call transcript

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Operator

Hello and welcome to the Hub Group Fourth Quarter 2021 Earnings Conference Call. Dave Yeager, Hub's CEO, Phil Yeager, Hub's President and Chief Operating Officer, and Geoff DeMartino, Hub's CFO are joining me on the call. At this time all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. In order for everyone to have an opportunity to participate, please limit your inquiries to one primary and one follow-up question. happen during release, of good represent as what made contained call faith statements to the future. in the may forward-looking the the course or judgment Any the in company's best that such believe, of words these forward-looking use and and as be by expect, identified Statements the are of words. project, anticipate, variations can review cautionary statements the in Please the release.

materially to regarding from company's FormXX-K results SEC filings factors In forward-looking could the to projected statements. addition, and these in differ you in these the disclosures should actual that refer cause other

As a is over being turn is It to to recorded. call pleasure call reminder, this the Yeager. conference now my Dave your host --

begin. now may You

Dave Yeager

Good earnings And Group you Hub in Fourth call. afternoon. Quarter for thank participating

coupled and ago, Joining Officer. XXth quarter Chief and EPS on has me the record income integrating revenue, We the focused led today year. parents Phil in my anniversary, of Hub's revenue net services are On the $X.X Officer, DeMartino, for XX we're Geoff Financial value-added Yeager, this years President the Hub the billion Operating the founded to an our full freight services fourth Group. full attractive our customers. demand $X.XX and $X.XX business a for remain quarter, for Hub's of record year. value the by Strong for reporting with needs Chief providing and of and proposition with our

economic macro macro strong while will and sales, Imports. winners have based with expect our work to the we with technology undeclining non-asset unemployment We X% investments to to business. in GDP, growth services fortunate focusing who inter-modal retail perspective, very We're our favorable customers. today's The economy. remains our will conditions been a outlook strengthened rate, diversify continue benefit positive continue in and capital From on customers

customers restocked. and their addition, to inventory at to shelves need be retail tell our historically low sales that to to continue be In levels continues us

capacity expenses, and rising truckload will believe inflationary to continues to drivers, continues regulatory as imports, that, production, We of increase outlook costs be shortage With Phil of will prices turn I drive our experience supply of the for to economy backlog insurance to a business as due call will and similar be XXXX truck On much review the side, that changes. as in constrained pressure. with the faster to over lines. to XXXX, our our than the issues

Phil Yeager

awards of was record Transcon XX% transit revenue margin by after efforts service will fluidity both and which and volume driven customers, of and Gross year-over-year all rising street work Thank in America network growth you, XX% I financial declined XX%. decline our and start in declined year. service our West improved management North Dave. hard by sales more rail Local flat as offset volume all sustainability the which members their several for resulted and this performance increased wanted our quarter. to for our performance commitment despite for to quarter Intermodal a across X% the I now thanking in year. team percentage line and discuss year-over-year yield XXX basis while remain declined the quarter improved East points than Network XX% last as transportation Local and sequentially elevated. well balance costs. a

increase with We utilization customers our rail on our of while are to focus capacity. collaborating our continuing productivity latent improving and to partners

improvement led quarter X% declined per which margin third-party basis X,XXX we to revenue our grow strong as day units stronger our reduced our to per driver sales anticipate percentage despite from and return investments a year-over-year. Dedicated point network. Demand intermodal support year, Hub our plan the throughput truck by rail revenue to fleet of remains drive as and improvement and this greater a we gross service fleet. to customers invest while to in our in partners expanding ahead, a usage customers continuing Looking Group, XX in by in

in improvements by as transportation sales transportation We lead of final year-over-year points and year as margin and prior mile and growth revenue offset have new lost we improved yield opportunities percentage offset pipeline warehousing managed our the in believe business which basis service transportation by was Gross a final cost of in accounts onboardings offering and Logistics onboardings, to quarter, our operational a this have year. year-over-year in XXX discipline will from in which the increased strength increased driven return strong and XX% offerings. consolidation, fourth and as mile management great increases consolidation. managed

our to and we executed growth full acquisition basis anticipate percentage which have Choptank of the our XX% volume per chain shipments, XXX% demand comprised Brokerage exceeded year. our in given supply to quarter. services year-over-year spot truckload and continue extremely the in LTL continued year-over-year, the organic in for declined points as solutions. revenue The higher Choptank has on global expectations. as higher volume strong our Gross of increased of dislocations XXX as as We Margin this unit due revenue a of XX% acquisition sales well growth the

We systems growth and start with drive plan. expanded that, force I and our financial ample With and cross-selling. will leverage performance. year our hand are to discuss over strengthened through opportunity sales winning network, to We're integration our strong off to customers Geoff this on to to it track our with see another

Geoff DeMartino

the at levels, grew and in for Revenue Thank record XX% you, all-time quarter featured QX profitability the the year. quarter and revenue both XX% full year. Bill. the

million XX.X% of for record year. our focus XX.X% performance, margin to and gross efforts and $XXX Gross recovery the X.X% led on Our operating efficiency operating for income for of yield management and margin of to quarter or cost quarter the the led revenue.

income year to well transportation benefits higher sale due last the full-year X.X% or recent to last compensation our For offset from acquisition. equipment to from incentive related revenue. expense. Salaries $XX declined gain the compared G&A by to of as of the our expenses and a year acquisitions, on million operating $XXX increased record due was as higher million

four Our the the $XXX quarter quarter net of million for the our in of the cash share $XXX full and is acquisitions. year, diluted have X.X EBITDA, substantial year. million to EBITDA for leverage our continue generated which times in through capital prior nearly operating $X.XX, We times and to we business. and leverage strategic million earnings additional highlighting business in per the was $XXX With of flexibility invest substantial expenditures

With bullish our driven have outlook a level. inventory for trends, spending low strong We and macro demand customers, continued consumer by growth at from XXXX.

and to further growth our will to earnings. lead conditions We operational efficiencies expect continue and will supply management chain that in be constrained yield

we EPS For to $X.XX XXXX, of are expecting between $X.XX.

We of well approximately $X billion expect to billion billion, way our by to goal putting grow revenue of us XXXX. $X.X achieve to $X.X our revenue to on

We and expect of deliveries inter-modal of as improving margin will gross to our volumes XX.X revenue year. container service. growth We return a the XX.X forecast to XXXX, supported rail in by percent for

surcharges, increases, costs asset third-party rate transport, wages. offset ratio rail drayage, driver and for higher and turnover As

we million and For year the million. expect $XXX cost expenses to of $XXX

as yields seasonal of will is of by as half earnings the be quarters XXXX our expect similar transportation for the offset the in back costs and rising roughly strength each progress. year We

to $XXX is million million. capital Our expenditure $XXX forecast

X% XXXX, containers top growth unit. older X,XXX will This ordered in of of XXXX. net for in have retirements X,XXX of comes growth result or on after which We XX%

The XXX for of attractive fuel are have lower which to older We that and efficiency. improved maintenance also delivery ROI intend over model of take an tractors. majority with costs replacements

our example XXXX, a another We future. of our of headquarters revenue the long-term campus targets. up will also we in margin expansion making introduced our for XXXX, and significant be investments we're finishing In

closing and in of investments our Our recent of illustrative also business. significant will make and potential. acquisition our Dave, CaseStack, are investments Adding back new you introducing Choptank, offerings scale the to fleet remarks. the we of strong NSD, cross-sell service with type strategic we're for in

Dave Yeager

we'll the was you, while growth up bringing here any Needless strong Thank in that, with XXXX open believe for core we investing our our to clients. to as XXXX We service continue same our expand for Hub. And offerings line significant has say, the to opportunity business Geoff. questions. value a

Operator

from Thank you. session. the now question And [Operator begin Long Stephens. our comes Justin first We'll question-and-answer Instructions]. from

open. line Your is

Justin Long

expecting. guess is more like was Can from? maybe onetime? where is you just street anything results. after talk little can what that gap to drivers XXXX that when If more versus these kind that. results you congrats above seeing roughly back expecting, Maybe think October gave in about importantly, guidance the feel of today and sustainable us with and and the I what the a going I'm those point. shock the in primarily were bridge still upside into or of that to came on I $X versus bit start Thanks you And in you transient came help you

Geoff DeMartino

across there. had our anticipated Sure strength higher a of Justine, yield intermodal. gross the the business. your margin holidays, to expectations. We you surcharges this actions our of impact generated thank exceed management for it than is lead of comments areas we really Certainly around to did by our saw when intermodal, impact Geoff, the the in came QX did couple

margin expectations we done on a to addition, that the And business quarter. of line In up we based exceed The of gain great of we job been our as fourth outperform where has business a side Below line top they've the sale. yet logistics the improve expect want in job the but results bring did Choptank not done do we bringing have strength managing well. good in really performance be expectations gross our yield. to did really did Choptank on our in year, them really there. next

units per able So to higher were we significantly anticipated gains we than at sell had unit. more

led QX. to the in So that outperformance really

in be Going next year, have to into chain anticipate our We like to increases condition side. of rail conditions do remain significantly cost price on demands, able this, will coming -- continue going supply we into we'll constrained expect freight the year. we build next on terms do

business. will there that our effect as typical the into drayage come XXXX. driver as increasing do have market below to we will expect our softening to On some some will we the in year. do continue wage here the February, the expect have third-party we competitive part well the truck And in of costs point expect have we merit be then side, used during at line, We'll increases on

as year quite but next anticipating not we're [Indiscernible]. So performance strong

Justin Long

as XXXX a intermodal maybe said the get in and you're you the grow and volumes, guidance. price rundown are getting any order growth expecting bit way but of baked into us could I helpful on Intermodal give we expectations little maybe on that follow-up, my volumes the more intermodal you accessorials. magnitude shouldn't That's for trend color know some could Okay. the

Geoff DeMartino

and QX Sure, growth a our to driven in container lot volume. volume side low-to-mid-single-digits, right here then we with inter-modal in which take starting next QX are year we're XXXX, on expecting to away delivery help the that a deliveries, we of really return in by got will

mid-single-digit some that full expect We rail there. off we're towards create realize low network continue to price, part single-digits then the able the will volume the expecting will the the into that of the price improve, we'll be will service be we we start our get year-over-year of the down to year will for by capacity we'll in and handle year, in the think on stronger end come to year. side, first that And increases time the help

Justin Long

again. Thanks helpful. That's

Geoff DeMartino

Welcome.

Operator

from Wolfe comes Research. question Scott Next Group from

open. Your is line

Scott Group

guys. Good afternoon, Thanks.

year-over-year understand think and the maybe the us for at on margins costs look, guidance. said along lines, You have is gross that the but gross on flattish guidance outpace thoughts X/X comments versus you when you and just X/X, those I if two to margins first maybe those help pricing be second beginning

Geoff DeMartino

Sure.

We're earlier, increases cost So be back going year half -- the some to we expect we the weighted cover But transportation are expect that roughly going be do as with our will increasing margins you of mentioned the goes to on. flat. will do costs price. year-over-year more be

rise strength that that, So be and of of expect would will that those see the we're in the expect but typically costs some year, back surcharge do year. you're by transportation offset Scott, the the of throughout see -- you course we we seasonal half

Scott Group

means second What margin? for for half, you roughly gross first that think do half,

Phil Yeager

Gross margin pretty be I percent, the it's course consistent throughout of think the to going year.

Scott Group

low guidance this to if Okay. XX% going be assuming thinking up and service it we're is the to some over some count container reduction about and sounds on volume then And accessorial. think like you're the maybe in I mid-single-digit, improvement right, in then

volume the in lies fluidity improved planning, in So better.

Phil Yeager

Well course year. throughout the the in containers come the of

a full-year basis So to that we're mid-single. expecting on low

Scott Group

the any Okay, improvement or ports, what just [Indiscernible] market and last for then thoughts share latest that seeing this guys. Maybe what seeing you the and year just means you your Thank thing. shifts you. -- on year you're then at if are next and the coming

Dave Yeager

Dave. is This Okay.

that on some we've years. been many to new far the them many, are for entrants the of competing Pacific, as As Union coming with

a as also twice Intermodal so that allocated Intermodal the the significant I'd partner have where and we're have the And competitors. on largest out Hub we times really Intermodal. don't change. XX% size fact that of five Intermodal we foresee we our the Schneider of size towards drivers UP And the of competitive point either more Knight than in

is chassis $XXX We UP. specifically million side as gearing long-term scale. suggest featured as that great capital with UP for we that the terminals. kind have additional the have is XXXX. investing And on positive a a business well in a come the of would to on that contract Targeting by relationship of it's up note you positive with also think benefits I I that very that

So Hub a net these competitive commercial bottom change. a neutral not to basically and view is, be we line major for

Geoff DeMartino

the highlight is asset-based than being other thing other providers a us is little aligned that UP the are This density obviously give and UT, maybe other with more aligned that only the providers one CSX. two Southern will onto bit Norfolk I'd the with with coming of

So we with reach, more a good that interline think provide lot option density, more have and we better a will service. a NS,

containers. seeing seeing On for think of congestion we And import the in your port rapid that side question, remains our in Demand own I improvement very strong. of the aren't we're international there. a

some in So see back the if improvements even QX, next you're QX, you're peak in season over few again. already months, we

provide to a grow for year, So don't see we into to at opportunities congestion and this well port of point massive improvements should us XXXX. this that continue

Scott Group

guys. you, appreciate Thank I it.

Operator

Fowler KeyBanc. And from the from comes next question Todd

Todd Fowler

of views that guidance? movement you're important important guess thanks I results service message the on understand I evening. embedding how to outlook I in I a view that is improvement how up, the rail expectations in quarter and service, there and ask the able When and context I volume to guidance about and and your in you're rail put important thinking from you good I at look Great, wanted about service. it's service rail the the understand the fourth improve are similar just still think a if between materially, but answer just do And of a I a how and your rail service can get guess, you volume standpoint, that's that? from you doesn't an price. your context perspective, to from

Phil Yeager

Yes, to look road, customers you're right they're allow want to that's get fewer thing going to in our see absolutely more to term, to inventories think business do over service I order, more convert improved long intermodal. going shipments, as right the from the better to us extradite We going their Todd. that's convert

service better to consistent going and is capacity So more and a having really products one help. available a

a point QX. deterioration at at from least seen this have slight to We QX

the weather that that's improvement. really We're as we hoping see to subside can well really hold. starts think seen take weather-driven just that as haven't as investments winter I we

year-over-year I an think actually piece end the customers. product our for we've other seen in to is us our service improvement

So we're our products. though in that. really that, times, to really about disruptive we're excited pleased even They're improve with able service

at this given rather service we'd market. opportunity margins, accessorial that the costs and time with that I is see potentially higher. volume. at be demand out don't that I question the around the And think moving does much subsiding point, a and that there, improve? with revenue it is deteriorate the much this really driver given constraints The

be for forward. a that'll think going us good we so formula And

Todd Fowler

the itself rail of just Would you're was that and context makes that's And the seems really certainly guidance understand that it look it I follow-up, context for that do achieving in revenue something supposed more that the guidance targets that think level much Phil, maybe is of the low 'XX sense We off with service. pretty close. wasn't high expectation or XXXX I your to the like XXXX about of guidance of, shot for you we your end and at isn't earlier how a for I so of the straight the your when the know guidance. component a XXXX in end be service that but guess guidance 'XX improvement in business of be helpful. my the it the dependent the Now, things lot in feel more 'XX, 'XX side? confident post on Thanks. the on

Phil Yeager

the is do. of mean, going the getting No, of but think way Choptank, give a is through I both think are I part we're there. organic, of to to to chunk also acquisition range. I there big going mean, I which Though, we guide the continue benefits way we a get the of did the

we make the higher end range So if to XXXX. continue we can would towards that, of acquisitions by like the anticipate being

Todd Fowler

Okay. Thanks for time. the

Phil Yeager

Welcome.

Operator

question the from And from next Cowen. Alper Elliot comes

open. line Your is

Elliot Alper

Great. Thank you.

discussed business, brokerage quarter, for about whether of quarter Can those the brokerage the most how of in in some the has and of wins 'XX? side should we some cross-selling the Choptank. on of the materialized discuss you low-hanging and that So last think opportunities margins fruit you

Phil Yeager

is yes. Sure, This Phil.

lot are a thus fit of and with a far. great have the group it’s speed really cultural great acquisition, about that They move We in Choptank been team with excited a particular.

months We've We're continue and phenomenal. is been the seen right but from three that. we've surface scratched targets, Choptank really that. that's see me, we to the which only schedule to of cross-sell gate, want out so phenomenal on our to record of organization, actually And the ahead of

acquisition value, actually where that out with positive that a nervous those share we're and you around existing the able is how relationship. real come customers play. get more I'd only of a to We've seen I other with we during create thing that have an little joint actually relationship deteriorate shared will actually customers think not a the you interesting sometimes even

so it’s And huge also an And to have customers into Hub market excited incremental a be progress excited selling offering. our we're year, that in this refrigerated just To to the containers refrigerated I'd so about product refrigerated going I'd our -- Choptank customers say on getting there's really only investing existing of the continues we're we're all-in-all support a we're opportunity to help I piece share making significant XXX is and real really demand. and think supporting existing market. think other amount that building that actually started

So feeling very good about well. that as

Elliot Alper

we about that this of Okay. brokerage year? And should structure the staying think margin the relatively business same

Phil Yeager

lower that think a see margin per lower Choptank have margin spot I percentage. you'll moving percentage, had shipments of has mainly that higher because revenue gross typically unit gross

might you but year. that that come I throughout will So be see think, on consistently we focused down, the getting higher

see you'll I on similar a think least is between market our continue truckload, gate the But the LTL does sort the throughout of similar existing trajectory. remain relatively we'll spot to that out at brokerage year. of depending and forecast see what coming our

Elliot Alper

Thank you. great. Okay,

Operator

Bascome with next Susquehanna comes question Majors Financial. The from

Bascome Majors

the you for there we were initial Thanks. Thanks think fundamental some outlook. puts conservatism might lot the on for and in guess people conservatism, takes about risk and that could next out taking XQ, themselves I four market might of my some about be questions. Can when projecting are talk where where for you business? be made Into of did not the getting near-term. back the the before you a your of quarters what ahead argument conditions idea that what saw just years strong And certainly changing

Geoff DeMartino

do to Happy Sure. that.

a market cost meant give current input cost the inflation. some was encompass conditions to with forecast Our range to and

in is be strength in of on to then revenue Additional benefit that gains more more additional which year. strength will potential upside. at used on the facilitate to in for mid-single-digit. surcharge And would grow of course, additional If which continued the We tightness stronger the acquisitions of in aiming the that's rate market in lookout strategic market, our are conversions. areas back there certainly like another higher be another half area upside, in the to -- result we're truck And inter-modal pricing. could sale there's truckload going truck could volumes a Well the us. than service in could areas truck source inter-modal for then of come

return be tailwind needs a spending there's big shift would their if downside back so There the a oversupply in to a that into we a would we service, that the could spending and the be back if to there bring have would could guidance. truckload sustained inventory down and for weakness on is to while. a minuses consumers On If way. any that backlog shift consumer Those a turnover additional the negative. price, market, will that be services. that can't think driver just of in that a pretty of is biggest go be if pluses to then the rebuilt way But other be XXXX,

Bascome Majors

expect Thank fairly a that. you seasonality for for normal this anything you Do year?

Geoff DeMartino

We don't conversations of and out strong seeing to our in from data. demand. we're Coming customers very year start at this change point seeing the a gate with foresee the we're what the

the yes, feeling which will market gives So, us in continue guidance. confidence conditions and like

Bascome Majors

you. Thank

Operator

Tom And our UBS. comes next question from Wadewitz from

Tom Wadewitz

to I could that's add just momentum I should of company. do look also of think next bought the you've A XXXX? -- offer businesses? we place M&A there. of with in in high-quality to and the and in if you afternoon brokerage likely, in backdrop. to strong a deals. expect Where a what more something would is do the a terms might -- Do go you terms the then place you to just thoughts of really where you be on really firepower to got want you lot Yeah, good on and some ability wanted momentum mean, obviously results. see congratulations you lot I

Geoff DeMartino

we of good the out doors we the solid the a expect a had that are we profile, management We've fit on just definitely and of our companies business We've knocking be to to think and a to diligence, in team new great the ownership. finding customer to what we're with our are and led fruition. that The NSD. unit with think very willing we're on We front. to services them. got sell commercial leaders. that's Choptank, active out lot success lot our And to existing upfront has successes Sure. give opportunities really from pipeline. recently coming had getting know those of base we've got synergies business, spent the We've really when penciling to they're with a M&A engagement We've I got us

And form so well adding our scale going forward. adding example both an that business strategy will of to a really a existing great as capability. Choptank was as new

Areas So targeting we transportation providers. very logistics brokerage have scaled acquisition, in up to really solid very, to off. we now going future refrigerated platform build be for and a for non-asset-based

retail non-stop big That great area deliveries space, do and the CPG. Things of fulfillment bulky target installations. footprint area with appliance opportunity is to us. have and really like That's ability think interest around lot mile example there. example. But there's the and with the would to today an of being We what growth. as of final customer e-commerce that a an don't really an we'll We be we our base another a have

Tom Wadewitz

in own timing perspective well. I little maybe wanted you to great. terms you the volume more container then guess, should of ads, as on and attention you really what the capacity, we what just of are I yeah, key a to your if Okay, on the terminal volume pay can side the and give ask better, Is is drayage volumes that factors the of it get on important constraints inputs. the can feed output? operation, upside they some it do intermodal are into that the rail

Geoff DeMartino

coming the it'll trajectory throughout year pretty even only as season, XXXX cadence peak into come a the bleed We'll sort of to XXXX remainder all year. order we've up point, the than we received have be deliveries of around November. and first X% less at of of really our the part and so the really orders Sure, last leading this had the year. throughout the in into in But

any service that if COVID think nice like new or don't staffing times going create is to assuming any or shortages. tailwind, obviously be I in anything see variance or -- that we turn a drops that

anticipate you're but with a on We start would year, we X%, were throughout down up So percentage X% January better to sequentially. did our the going growth. see volumes

that's So had if during could carry we last the see year. out of start year. first February of We and overlap nice a to shutdown see we that the we to momentum trajectory remainder of Union Pacific the quarter growth start as the think into continue for

Tom Wadewitz

So easy-camp maybe something on March, a up that? monthly March -- be you could potentially in like actually basis

Phil Yeager

throughout the improve growth and We to customers more then be progressively yes. think trajectory as moving And year. up Southern well. going I agree, and think see percentage chat fluid and that's as we service to upwards we we're staffing do volume upside Yeah, more will that, to so growth become should That trajectory. to continues online get like start it Norfolk NYSE is our

Tom Wadewitz

Appreciate you. Great, okay. Thank I it.

Phil Yeager

Tom. Thanks,

Operator

next The from Allison Fargo. question Poliniak Wells comes from

Allison Poliniak

evening. good Hi,

contribution way of in anticipated. than within want would 'XX? ask from going your acquisitive the it's Any for you like be context Choptank. Just of growth revenue the core there? guidance what versus to Is better a sounds about terms It there the color

Geoff DeMartino

the that. midpoint Sure. looking organically. about total. at we're We At in can at would I XX% [Indiscernible] about growth be XX%

Allison Poliniak

Could would that your then it leverage where sounds range, certainly active level maybe within have be And you talk comfort your it. lot seems It today, just you leverage? question on of but the pretty with pipeline? just capacity to back a like comfort active Got the given pipeline. a going like M&A, level

Geoff DeMartino

But in a think of trackers, today, we're but yes, investments at expenditures gives in closer us to Sure, to basis both capacity in acquisitions. about for onetime, kind capital lot X.X which like flexibility do X.X we'd times to times EBITDA of going maintain times, the maybe the net leverage to we containers right two us north deal. comfortable our leverage of to and EBITDA overtime. We're pursue up also give the EBITDA

Allison Poliniak

Great. Thank you.

Geoff DeMartino

Welcome.

Operator

question ISI. from comes Jon Chappell, from next Evercore, our And

Jon Chappell

growth the of there's been the afternoon. a quarters. the industry, and of couple Good you. logistics, the has across been lot Thank remarkable pretty in focus Phil, entire industry last on

fast Your lighter focus points little bit the XXX more up you the has on but onto bit as your of made top line margin expectations, the can? gross basis on-boarding with be you customers bit growing revenue platform trying a huge. side just more a Are than the to to was your as little margin opposed a to logistics disciplined as

Phil Yeager

exactly that's right. No,

think truckload and in I look LTL at space. -- our scale have segment, we we when we logistics the

due selective that to want So find then we for we're fit us term. making the to that the that strong want be a as generate customers and get can we to purchasing exists be well. our our return to long investment And today, with profile, we power for that

we've yes, I and on our that think right bring hope the we So much longer-term. much has us business to that disciplined more in will allowed be stickier, approach, been

Sometimes revenue, high really those sorts engagements, that can of you low be see with some profit volatile. somewhat of

much have think out be selective we And for so more us. beneficial I been to there. And it's proven

Jon Chappell

by the that be for throughout what terrible shippers heard The year. the interesting of pricing second just employees think I yes on at want inter-modal it's gross but here, as be just to and year the the you're said it the data it weather. XX% will last on margin you I the to in real the these back and backdrop? about labor big stick half about year, to Geoff report one Should and quarter pretty those Great. in really and facing we well, volume And was EPS operational in as increases showing outs harping offsets more a just keep needle shortages, up like year, that a half of like short-term the pretty don't then mover, the quarterly macro we've my follow-up, of " are part a basis continue will think "normalized and be the of ratable XX% huge lot that early the headwinds in was this

Phil Yeager

XX% our QX, seeing season. right. XX% Sure. to are a Yeah, QX. inter-modal around a XX% just that's to strong bid QX, then in of we cadence I you think be And re-pricing Yeah, it, give business going is and to start

heavier past. that a QX actually typical is So than is in little years

to right? is we little want upside so forecast right so continue that a there's benefit and a customers is going to going us, investments the now, allow to that. And That quarter. a working automating And second pricing of really to where in they do but be to it's could these capacity for be bit in us given currently,

I bit going also a season of this occur was more year. anticipate that see little to you next So thought year, we would peak a but that to normalized

well, continue issues year. So throughout and issues if persist, the these challenges chain see supply you these conditions, and could to

Jon Chappell

that's you, Thank Okay, great. Phil.

Operator

the comes Brian from question And Ossenbeck next Morgan. JP from

Brian Ossenbeck

the contracts taking else the pulling the this a Is change little just thanks last question. pricing few agreements, of Maybe some from capacity. at how it contractual anything there longer-term Yeah, on side? How but bit, you of changed transactions on this say Appreciate done, quite would these or of good like couple that inter-modal least some especially different whole over different, perspective, will forward are think experience sounds a do a the shippers you of that obviously to evening. to get time? in follow-up has the forms commentary years pricing. lock is trying things Obviously, different

Phil Yeager

we seeing load a floors exactly we're more ceilings-related a that's interested of that we define And We're very multi-year pursue right. right publicly base And data. framework think comfortable available in that those be contracts customers beneficial. network especially into those the continue with to or and with are moving of customers. that's will as and lot with I business to

network might the might we locking feel that dare, in comfortable business so multiyear we us is period. for in business okay higher a lock prices the And these good half really customer. But with, in not a with for beatable

and for So taking in approach are we for interested customers, of customer, that as well. it a very lot they're

seeing of other The that is brokerage consolidation or now whether in right it's providers inter-modal. thing a we're

process. coming with out the going and that for. our for that opportunities that like through We're with so of think accounts grow really providers, we to And some to we've benefits ourselves customers strategic to continue stepped our see strategic up

Brian Ossenbeck

great. that. just follow-up on Maybe quick Okay, one

list, point, On more of the past. the least at it's At been in in than second material the way part the conversation. a ESG this

Phil Yeager

savings inter-modal, advantage and to to take service think that. contribute lot of with continue right we through Fortune we they chain to is years a continue think life, them to team every to be going large about several level to XXX for our to get the provide company. And convert fully which potentially carbon a had what is Certainly, business need how sustainability is could that of and a company can efforts data supply emissions base, thinking story come. customer our I We the around their to of

into inter-modal the to think to as prices is other well. conversion play to I that going fuel is continue piece

conversion see well. up to as if into So good could to inter-modal another move that that tailwind you that be comes continuing order

to are all continue think drive those for opportunity we nice going to the year, conversion and a next So we think beyond. factors

Brian Ossenbeck

within on anything just $XX focused transitioning briefly then And IT spend projects on total What is integration including Choptank. to wise you're there you helpful. can that the of still working you're headquarters. be talk the some about Oracle, the on million Maybe bigger over

Phil Yeager

Yes, so a been for We've for you gone customers, differentiating members. vendors, team approach, projects and to really but really for built differentiation our for commodity on focused by we've notice our job workflow, of tracking satellite our done can a provide so our automating to in We've better workflow. be our their drivers end-to-end utilizing intelligence visibility. and getting to optimal teams our they great

tool -- our over the initiative I year. workflow with last our seen customized improvement that year productivity and really the seen within think XX% past an benefit one within in was that we've over a We great on volume team management I've a built brokerage. basis us

think. organization. to results, like and to the across And make going really that continue we're So that a impressive we're doing we investments

to And to more I responsive do think in efficient us top to job to more great more see your going our and our got to effective a and acquisitions. integrating so become continue we that, point, and you're customers. of On

and done capital I with getting management. our a human phenomenal job of in our integrated think Choptank ERP have onto we

is more top of acquisitions, on that also very that part to of going we're do of be make to well. stay going All but integrate that the sure work. we timely, And and really as we

initiatives continue trucks. to But assess technology, the focused those So truck we lot on. we our I'd we're of also big that be investment in would a electric highlight

A a lot opportunity. I that from management really tools, think there of the well would help that as great doing out are are that's perspective have interesting vehicle as things exciting We're workflow test. we well. autonomous even beyond here just

Brian Ossenbeck

Phil. Okay, you. great. Appreciate, Thank

Operator

BMO. The from Chamoun from Fadi next question comes

Could your unmute your Your mute. if is line line phone? you Fadi is open. on

Fadi Chamoun

the in all, on would question. the turns that in that about Can first currently times? the and like look normal thanks us of and Good Hi. Congrats Yes. have afternoon. intermodal results, for the box remind you you what network

Phil Yeager

Yes.

a a I impact, We our decline component the were for saw mostly bit, The full you Transcon fourth from the it deterioration year out-perform to percentage or a year-over-year. your a the was might transit in actually not of of continue think about fourth be can service. to really the year-over-year rail the see there quarter third our little but alone that So massive that volumes gets remainder network that's up we mix two. point quarter in a XX% X%. driven sequentially There's by quarter

by was think customer down. were On decline that customers, demand driven was I up that unloading sense to levels sequential when makes as time pool coming that and the staffing mostly

in so longer our And saw we some pool. customer dwell

as upside could that. service be times think you back on as as normalized a even than get I levels, to XX% more look it So there's here higher and be if could of lot at our we much turn normalized levels,

we're place hold. year see see that we'll I take to think the and progresses, So that take that improvement excited as

Fadi Chamoun

a looks six prices is the cycle feels back like where it on to to throughout and struggled play volume gone -- that a to volume versus look were yet today loose up structural out? multiple we are intermodal needs we've fuel to Okay. record start intermodal with second to I intermodal or mean, question five, few really side that does I opportunity have and tight the impressive. on really growth intermodal going saving and volume grow. the picture and truck and What here intermodal service years load, guide that market And happen the all the if products And was for see truck the back through side. down years now, not

Geoff DeMartino

I Typically commitment there XXs. were versus in acceptance for industry, a in have high is tender XXs, industry inter-modal inter-modal XXs. to capacity, which are are rates the been the the the truckload perspective, think low mid low

days for there. particularly What now They're shorter there, service a fastest So products. days at it the extra but seven can't it be one-time days. consistent the two not are our two than necessarily with lanes commitment is to It those truck. think to be don't two next, days transit. is and okay has longer is capacity, haul looking in right capture I two savings, after be consistently to customers needs to days forward I think the

and have to I more I is than of haul on with a for those where see where room as length maybe partners that That's think all you of need, is can think that better versus you savings along consistently well, service, those that delivering performed local our capture we basis so a know business very I And you shorter error. and continue less our is we're focused why what on consistent our that. Transcon business

Fadi Chamoun

Okay. appreciate Thank that. I you

Operator

And Instructions] from question next from our David Zazula [Operator comes Barclays.

line open. Your is

David Zazula

taking Hey, question. congrats on the the quarter for and thanks

a to to ask and use rail previous bit in answers owned Just you'd your of about it the equipment. alluded wanted of little one

year? that think the the what, challenges that maybe what you challenges and presented use rail bit if I can coming in you any, about of more opportunities have you quarter, in during owned discuss ease, and a equipment it might little talk your for but the

Geoff DeMartino

Yes.

better have to the can well, street fleet. a It's done the XX. X% volume to higher probably that -- So have we us. fleet. a lot our we you're in was when has manage year Mainly we network that of our you suite so own Last be year seeing because XX% decline of really rail business been for used closer our were expensive and we removed own that's rail volume under of our would inboxes. part of much about This less

part of you're a some that is effort and why volume concerted So year-over-year been seeing on of decline a that basis. has

David Zazula

the being to anywhere constraint sequential note kind to related Great. And labor a you but volume that. then I the you know headcount didn't throughout I businesses. if don't number of as a as for guess follow-up, XQ, of handed any have

doing bit touch times. capital labor what maybe to up keep you're the and human labor challenging little count about in So a

Geoff DeMartino

Sure, really the so X,XXX, at through the end culture. capital up year I Last from our -- X,XXX. was around just was perspective, of non-driver employees then by count acquisition XXX a we And human did think the value XXX but just were year under our we add we head Choptank. headcount of

great resources a team. We have human

is have be a giving us. turnover team greatly and worked so provide so really to for we've in a their better really more make at they hunters progression great environment I at whole better we we can service and them higher that and has I our rallied job around get improve customers organization sure anything we're give opportunities and but our -- one, hard minimum, focus. We keep tools that them effective can has not progress the say to perfect. think And people to also continuing That's grow. career. going And experienced somewhat but we're we their to turnover that opportunities and would our our to really have continue be opportunities to and we've think always impacted don't

David Zazula

Thanks.

Operator

Yeager call And remarks. questions. back over the to no turn for I'll further we have final Dave

Dave Yeager

thank the Well, Fourth us Earnings joining you for Call. Quarter for Okay.

you any be would Thank and Phil do if Geoff always, As you. have additional available. questions, and I

Operator

today's you, concludes ladies Thank you gentlemen. for This and call. participating. Thank conference

disconnect. You now may

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