HUBG - Earnings call transcript Q4 2024

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Hello, and welcome to the Hub Group Fourth Quarter 2024 Earnings Conference Call. Phil Yeager, Hub's President, Chief Executive Officer and Vice Chairman; and Kevin Beth, Chief Financial Officer, are joining the call.

[Operator Instructions] Statements made on this call and in the other reference documents on our website that are not historical facts are forward-looking statements. These forward-looking statements are not guarantees of future performance and involve risks, uncertainties and other factors that might cause the actual performance of Hub Group to differ materially from those expressed or implied by this discussion, and therefore, should be viewed with caution. Further information on the risks that may affect Hub Group's business is included in filings with the SEC, which are on our website.

call, measures today's be on addition, non-GAAP will financial used. In measures GAAP earnings in and between are presentation. non-GAAP quarterly Reconciliations and financial included release our earnings

As being a conference recorded. reminder, this is

call my to Yeager. now your is It turn the host, over pleasure Phil to

now begin. You may

Phillip Yeager

welcome Group's fourth and call. quarter Hub to afternoon, earnings Good

Intermodal Joining of our value these a year challenging proposition the fourth effectively closed Officer. customers performance, significant warehouse we and earnings capacity investing focus with last venture executing me and season improvement leading maintained and through year-over-year how Beth, quarter, our our challenges, and growth, for of with margins was service year Group balanced what delivering on improved while volume driving to joint our EASO. Financial is our executed to Hub focused We Chief can Kevin completed costs service efficiency shareholders. We organization and controlling in the Despite for I managing with adjusted deliver alignment and excess proud am one on future operating execution our in today demand. customers, our our our strong at The the for a that momentum. peak and utilizing enhancements savings while we to across costs remained network

Along with dividends. through those and actions, we repurchases returned nearly shareholders $XXX million share to

continuing will are improve our cost levels we taken in XXXX, broader become and revenue we maintain actions our the growth exit capacity trends offerings, lead excellent all and balanced. about have improved to and consumer have with while earnings the across and to These XXXX. ahead optimistic of remaining trends look structure, we we to believe, more improve inventories service As industry to the the resilient in

our peak operating [ the focus in-sourcing growth, for ITS, network on will enhancing network, driver improvement year-over-year beneficial we dray productivity in XX-basis beginning and and performance with discuss segment our service. season due where excellent margins to delivered container I a quarter, surcharges, point now ] our providing

shipping of builds strong by chain had delivered to from we our inventory ensure surcharges record driven creating demand the enabled peak seasonal service and this the Intermodal, We as influx opportunity large diversions partners while In rail fluidity. season despite East Coast to from supply over ports road capture and and for us demand, we this XXXX the conversions levels the season. enter

local and efforts EASO. Intermodal year-over-year XX% volumes in growth West XX%; increased Revenue local in the headwinds surcharges network but down and season quarter, length in to year-over-year revenue more related this TransCon X% and an load XX%, as investment East due of per declined mix fourth organic we our year-over-year per and given with X% improve growth. average move fuel to sequentially through haul. to peak significant We and up X% will pricing anticipate up up was load Mexico due balanced extended have

[indiscernible] drive repositioning utilization balance. quarter on offset demand, by support able our than that were cost surcharges. container our focused our the costs dray structure decreasing in we efficiency, increased and more X% and with are We to improving on focus through year-over-year better through X% cost enhancing but to productivity per X% network peak

the our I'm pleased business. Intermodal momentum with in

this improved great and growth cost Our further service, for putting year. scale structure a in are position us

our growth Dedicated, improving meeting and our increased and XX%, demand In surge We day by year revenue capabilities. per closed the earnings cost customers. search truck of the we in while structure per delivering year-over-year

and pipeline of strong focused XXXX. are in on a driving opportunities growth have We

transportation and performance was Logistics, flat seasonal less and due our market headwinds managed in due e-commerce services. ] to and year-over-year delivered XX-basis [ margins In This Mile in businesses. our brokerage in consolidation we a operating point by demand excellent offset improvement our slowness Final in to

a Brokerage, by flat in LTL, to mix. negative X% helped with year-over-year In load We XX%, the reducing handle ] offset due per revenue market ensuring on we shipments volume, We partially which delivered growth count low load full services. our correct basis. [ truckload on margin focused declined X% a down for

To begin the and from year, carrier improvements events security customers increased to due we weather demand emphasis exits. are seeing our small shipment on in and

and customers multimodal We expertise scale, are as support opportunities us our projects our in available. bids utilizing and service win to and to positioning while spot compete become

we through the solutions, the managed of customers our close successfully In our year. supported

We improved network also utilization levels. completed which alignment, has warehouse our our and service

onboarding support organic further are to in and wins the drive growth new We our customer second of services, lines. have our and across service incremental and other strong first we quarters a pipeline will which volume

excited We opportunities and well and service in believe positioned levels, investments, continued are sheet have the our given we XXXX balance are productivity about strategic exceptional we [indiscernible]. strong

it to will With hand financial Kevin to over that, I discuss our performance.

Kevin Beth

Phil. you, Thank

go-forward our basis. As an I our adjusted results, walk comments results will my through focus on on financial

non-GAAP GAAP reconciliations included our earnings call. As to issued a and measures between financial reminder, release are this prior in

prior decrease For the full year. a $X of year, Hub generated over billion revenue X%

of reported intermodal of and over of revenue. was $XXX lower in year and load revenue quarterly a revenue down For ITS as offset from million, prior surcharge slightly the per X% million which dedicated quarter, revenue billion, revenue Hub year's the $X lower last intermodal quarter. $X volume partially revenue fourth XX% is X% decline growth of

Additionally, was impacted lower approximately fuel revenue Full the $XX top $X.X year billion. revenue of ITS negatively line. million

CFS the quarter. as transportation our to fuel of million $XX million $XXX lower increased to and revenue revenue in Full revenue Mile was to compared was and Final contribution the $XXX billion. $X.X of the Logistics year prior in business businesses revenue year Logistics in enough the managed lower not million brokerage, offset

P&L. the Moving down

revenue due purchase the transportation warehouse as of percent million well This XXX-basis strong decrease expenses. improvement when lower on a results a quarter, cost of $XXX compared million, basis rail from For costs to to warehousing as and QX year $XX XXXX. were the prior point a in of control and

the rest of were to the recent than Final and higher million from head which and $X due expense and the the G&A benefits across was lower $XX prior insurance was EASO transactions. by slightly million both organization. of the Depreciation claims offset count higher Mile offset by which amortization, and expenses million, decreased year transaction, Salaries and $XXX

result, income As X.X% margin our operating prior was the a year. increase points for the adjusted over basis quarter, XX an of

a XX-basis For ITS the X%. year improvement percentage for margin margin full was point our adjusted operating QX's was OI operating improvement XX-basis prior X.X%, of was X.X% the full quarterly year. over year, point X.X%. adjusted and ITS margin over operating adjusted a

Logistics improvement our for the X.X% operating year. margin our year. over Logistics was margin was rate X.X%, Interest adjusted of was quarter operating million XX-basis Fourth a rate other XX%. was $X income below QX full and and tax XX%, expense point last a

year, the For tax rate full was XX%. our

$X.XX Overall, EPS year. Hub EPS $X.XX the the earned adjusted of of for and quarter full in adjusted fourth

EPS for are fourth spread EPS adjusted a cash of in our full the spread XX% and full with EPS $X.XX the and increase quarter was We $X.XX cash for XXXX. in pleased over The $X.XX year, $X.XX the between year. the

and returned ended shareholders of we million. XXXX. cash in dividends year And stock the nearly in total, repurchases $XXX $XXX with to we million our In

line over demonstrating EBITDA Hub's lower the CapEx in in the with Our $XXX was with year, full million. $XX $XXX million resiliency XXXX, less million, was for revenue million Net to million. of $XXX generated CapEx million was full cash an $XX of our XX% year debt even $XX for the estimate increase year.

Our below leverage transaction, post to X.Xx of was EASO X.XX net-debt-to-EBITDA range the stated our X.XXx.

Turning guidance. to our XXXX

effective between rate $X tax to approximately be in of XX%. to $X.XX $X.XX EPS billion year. the range billion revenue $X.X and expect We project full for an the We to of

We on that we also in purchase of reached EASO projects. replacements do and for not continue tractors containers in of have plan capital their million into $XX end focus range integrate financials and to expect our $XX to and expenditures life, XXXX. the technology million We as

and to QX we we in increase segment, expect expected single-digit price is bid comparable volume single-digit with be cycle. to in of Pricing intermodal rates half contracts half ITS reprice increases our high of the second of part growth year. year annual the as full year the the the as first for For the materializing low

We late offset lost expect new to dedicated customer by revenue wins XXXX. as customers be comparable XXXX to in are partially

brokerage our wins and growth growth. to organic business revenue to mid-single-digit new expect excluding due we Logistics, For low business,

growth to efforts, and consider brokerage, factors potential environment. upside expect the in tax guidance we with we higher of a if segment compensation mid-single-digit volume alignment forecasted expense, Logistics see incentive Other our in is the rate. our truckload our For XXXX the normalization network improvement in continued momentum margin from

We expect earnings an year step peak lower the from season in due as demand, QX to QX profitability progresses. down by slightly followed increase to to

a was basis made, has with XX income in As segments. we operating basis. consolidated income growth. Logistics points, the ITS in exit both points Resulting percent operating points, team X%, or we to progress was basis XXXX, and growth growth a pleased of are increase QX XX revenue XX of basis in or with on the XX%, a X% or

alignment We balance also the EASO completion a growth execution and of sheet. network management QX initiatives, financial reported XX%, venture, the Intermodal of of the joint volume disciplined strong

focus past the management, drive stability and changes completed Over and our including our more We've improved significantly build asset on strategic out operating earnings. efficiency, also important utilization offering several years, several to to expense profitability acquisitions yield has we our returns. which business, have our made and in

the our a with operating despite well impact success changes in a improvement year. short strong compared compete growing positioned in Hub as These long-term environments. EBITDA actions year have cyclical these CapEx less X% with margin XX% lighter we Adjusted the of in from X% for showcases trough-to-trough over last strategic changes the recent line XXXX and results top accelerated soft and demand reported in the While the both full portfolio in horizons Group marketplace, have as years. for of

over line that, questions. turn With to it operator to open to the I'll any the

Operator

for participants also call remind and would I Instructions] be on XX like to will available is Hub the a website recorded, [Operator being replay this Group days. that

Our first question from of line comes Group Scott Wolfe Research. of the

Scott Group

in bit income little down a if I or the help that you bit a said know of maybe think But an year. earnings QX comment. starting from I of just just QX. little shaping just help an yes, shaping little terms the don't of year? with operating Maybe was bit a

Kevin Beth

it's thanks question, the Scott, Kevin. Sure. for Yes.

we While I give could help there. guidance, quarterly you don't think out I

Logistics and business our taxes, to and offset are the seasonal as insurance to by in Final network and Mile incentive Intermodal compensation segment volume in comparable alignment QX These higher increases, season operating headwinds a Intermodal expense and to our merit expecting we're increases tailwinds peak well due initiative. to While lower interest decrease as due costs. income to surcharges be related

EASO of we only included our that number, recall to is like XX% out Also, in EPS. I'd get but into point that volume Intermodal our that

far be of to EPS an EPS X than -- occurred better we on So basis, expect years. in do while the has each that normal expect last seasonality, we step-down

Phillip Yeager

Yes. we And Scott, year, this from as the QX in to highest QX is anticipating our fourth decline the think Phil. about and highlight a QX, earnings then quarter being a just slight I'd ramp quarter. we're full

Scott Group

just that you like sort Intermodal sounds and QX It The the talk you're views Okay. ramp can about -- throughout year how question. your around ready for of pricing. margins

be growth. I view concern and than far or But rates maybe seeing more think that what you're you to and do focus more going that up rates in about there's people as early bids? Intermodal on some think maybe the volume way to so is going lag on up truckload how are Intermodal going

Phillip Yeager

I a say, but little Yes. good we're is early in think in a Yes, Scott, it's bids, this really I'd position. Phil.

customers So peak. solid really a we peak have as It was our good a job to during well. supporting good did season

customers rates, One the lower that lock is environment. of we're right pulling a seeing to of in which are now bids good turn trend in try indication some to is forward a typically pricing the

not definitely to behavior but we're remaining see irrational certainly it certainly rates, is anticipating lower we're and competitive not as out that there, So any we're going well. seeing

to of lanes be Our is lanes, that's winning as network well in the be challenging focus haul continues as driver know we our to head up earnings price also friendly, power. business operationally on going that and rates largest taking

very we're that. on So up focused gearing for

year. -- at look we've the you intermodal single-digit In if of kind that in and midpoint, we've throughout anticipated should low price guide, increase our the ramp

that's guidance. So embedded in really that

Kevin Beth

you in very would on because timing, OI well. we're I type the of that season here I is as just add, bid So saw pattern side, guidance Scott, XXXX, And in that reaction think same of expecting right? the similar the ROIs

Scott Group

if And just I then quick, rail real this year? last purchase can. views Any thing costs on

Phillip Yeager

single Sure. be Yes. PT Thanks, We're Scott. anticipating Yes. real down to low digits.

though. board, And then visibility have across cost We on to we're that. good focused pretty the

focused the our are positioning We them us for very reducing on entry repair, in-sourcing opportunities of costs. All across everybody now and really is getting more productivity drivers, organization. ], maintenance in-sourcing are and and more on [ trains right focused out

some So cost anticipate we tailwinds.

Operator

line Our next Majors Financial question comes of Group. of from the Susquehanna Bascome

Bascome Majors

can took Digging segment walk the from into restructuring seeing you activities made from margin you point of us last X about in comments you the logistics, that some forward that of quarter of What expansion And is of if XQ. today? in pacing that the your any, and that? conviction seasonality business after XQ how, change what done? you've in What's does the

Kevin Beth

based Yes, that's and to Thank achieve out rate. point you. that XXX-basis a that's in Bascome. expect the third quarter, improvement called great Yes, do question, this the run we we QX on

the in of revenue change Logistics in segment. the mix little a seeing are We

probably momentum million for brokerage spent. that number expected and up little $XX overachieved, me, than There even to if the and -- there's good aiming we believe improvement we've feel more good we able in that the basis be will logistics cost that be that But there's the definitely savings. We've we'll we've chance So spent that in a a a $XX still further excuse XXX a ramp also as see million, to And make we reach, we're year are for. that slightly to points, progresses. lot. costed we the up expect it's

Phillip Yeager

Yes. Bascome, Phil. this is

about So once the OI feel again, really I improvement. good

a we than Kevin X-year what million was million, consolidation, on $XX period. spent less to think but annual the about and about so referring benefit I payoff $XX the we was was gave

So from about that. the sequential And margin seeing year we improvement in anticipate strong to QX, very feel achieving do Logistics. to good start we QX

Bascome Majors

an Or a pretty that do us Again that capital about looking? M&A the a needle? capital How either the And the year you can portfolio or you of on this done recently about mean, the you deployment be bit told what feel expect pipeline XXXX? front, little today? acquisition, I is you've later use there. move Will into good

Phillip Yeager

stool. is this Bascome, the Yes. right Phil. feel have the of we like I legs

the good those really right about we service pipeline. differentiation a so have and build cross-sell customer It's our can clients. We base broadening that And scale, offerings. have we continuing to into

year good I we've going active always we'll for think we're to We're we be on, but around got and M&A, selective a forward see opportunities. at an what very pipeline. looking certainly move

logistics through our has mostly offerings. on to it to will we've much and asset-based very we're and earnings drive. on still focused focused cycle our big able it's segments part as very in And improvement But be that trough-to-trough proven non-asset the then that, more and been valuable though been opportunistic this a yes, of feel that something be

Operator

the Our Bruce of next line comes from of question Stifel. Chan

J. Bruce Chan

on Intermodal question the a volume just side. Maybe

say And Obviously, One some of you you that strong your sequential talked had volumes. heard of expecting the competitors forward. a possibility pull in were demand you number QX. about think saw flat I I

haven't pull forward? any you to that guess, say of seen would fair be So, I it that

Phillip Yeager

is Sure. This Phil. Yes.

just We was up the see a was but XX%. October December give demand Coast, basis, to pretty up XX%. of you January West to XX%, volumes were November up year-over-year have XX%. month-by-month. we're kind continued on off strong up

So quite strong continue our volumes be to there.

they're at think supply will chain. customers huge see changes, just you just fluidity are. situation I closely, But our pull we think making the I of ensure are none point like any some the just of this to forward monitoring

J. Bruce Chan

that. And ask Yes. just Okay. have then, I up to follow and guess, I on

via customer customer far You of positioning? as via obviously demand changing or lot have needs Intercontinental. Anything Mexico, a exposure or as

Phillip Yeager

Yes. Sure.

the Intermodal our you company of think So -- closely. if it's that's watching about tell It's Canada, X% it Mexico we total about revenue. cross-border business, what volume. total X% are around and of you -- would our I

but situation. certainly we're the we're exposed So overly to it, not concerned about

the forward think customers. they cross-border within to think temporarily our Mexico some their we demand divert meet also in going to pull to potentially see ensure some continue is are Intermodal the to I that state that of underpenetrated. manufacturing we customers capacity demand, order very and probably But just

at So and we cost for opportunity border given we conversion savings. provide have the a can the fluidity the significant

So have that feel their also the forward Asia most peak already we so to was Lunar New point, chain, forward a there. looks guidance supply this I like see conversations about of continuing very demand. out really really more of opportunities. occur. that good, we've could you, and the have of the what this established some built positioned gain diversified could after of will [Indiscernible] for pull strong lanes, customers pull would intentional, tell pretty feel share very going It well regardless we U.S., on surcharges, But season a into that we're demand estimate point coming here what Year that. our to at think are that But be assuming see and at interesting us, happens light well. But and

Operator

of comes question Daniel the next Our of from Stephens. line Imbro

Daniel Imbro

Maybe I up want on follow the Intermodal discussion earlier. from pricing to

and get the networks realized that harder fair congested? elevated in congested weren't it I guess in where say through it year. the West, to being were going guide, get cover the be builds you maybe pricing assumes I it's mentioned, where this easier so price, the is things to maybe to pricing your East, will costs, is think if or price be or to the year to

network others fourth a are in seeing got you any of little that fix maybe balance look thrown And their to the pockets of competition balance as out quarter?

Phillip Yeager

-- competitive, it and would valuable network. Yes, are still Phil. This lanes in Yes. are to those Sure. our say we I is is the backhaul

versus share trying certainly trucks. to and in be customers gain front to continue of to that our we're So protect

foot definitely on we're So there. the front

equipment have we also you, operational seeing this inefficiency. given the it's that at business, tightness fluid We're need going we're to to And will network, us turn lanes, not focused irrational on tell to had if We're as opportunities as that's there haul pricing not that be or head continues yes, if this we to embedded in a point. aggressive year. up I very drivers pricing would then overly allow we on or there. our to, seeing quickly anything taking be

I across pretty you board. well performing would we're the tell

to the volumes lanes start perform continue local year to Our well.

growth overlap normalize as year those there. growth start just to see we rates significant throughout some the of the You'll

quarter back. well West going we've Our some mentioned, be and as Coast Coast did the TransCon are directed very think there well We to very in we and West opportunities fourth continues on But Southeast are strong. demand, we South strategy. to the -- during And Northeast. our bid to on very done length very

and And costs friendly trying on to focus just so lanes. to control winning we're continuing network

Daniel Imbro

Got follow-up the I'll then And it. on ask a side. Logistics

Logistics you are a talk can help to others Phil, expect within bit about XQ, XQ? Kevin, that at brokerage in think mentioned these after talked about, backdrop I tightening in you segment? given went the guess, the margins what then, margins offset that expected first margin good improve % sequential X.X guys maybe that during have -- you than the you worse I quarter And that lighter quarter? just the what

Kevin Beth

And But start did the increases And did brokerage we fees softness forecast, initiatives, our job an that Final that well perform the bit business, the little while was I'll work than of forward, than a getting our actually the that, our reason Sure. Mile better that. there we're of and ]. a there's we're were versus that main in with in And really, the a expecting. margin [ through to Logistics little we right, step making -- team expect take in in great changes positioned yes, going better was CFS unknown. expectations. performs the with also Managed-Trans some for you're back

Phillip Yeager

turn alignment, that Yes. Kevin this Managed-Trans logistics, be in warehouse seen behind of And sequential also having anticipating consolidation the calendar a benefit. and demand, in kind and improvement mentioned, as us of will But the that of we're in volumes. we've a rebound in our since tailwind QX the the recognizing

with little lighter pickup, thought. as had a we we bit than was of of end the more which kind to those But X saw there a of then of had last good we we of kind calendar, anticipated earlier shutting customers January a weeks just as than down the see. -- year, turned Both the

Operator

Elliot Our next Cowen. of TD question from comes Alper

Elliot Alper

were Can then for impacted QX commentary. that assumptions curious mean, of volumes? earnings Seidl. Right. Elliot you for on just quarter? I weather, also guys Intermodal some the year? could about in the the on end grow maybe to And and first some for follow the you guys, guidance do there expect the Jason but the challenging talk you maybe understand up high strong I low how

Kevin Beth

Sure.

more high one So, end truckload business as we high change between end the I spot far is low end, the top end changes start think tightens is end. and see we and the certainly certainly truckload big the the to as the of and low capacity more where profitable see and

comes if on come Additionally, that additional through, the pricing we around. bids could the as intermodal see

about is, We in big guidance. already, the baked I year the we of only half other think mentioned on in the this And thing saw Phil it what surcharges.

certainly So well. positive that a is as

I the low is the end tariffs think a is certainly possibility. on

squeezed would Just inflation, consumer, they keep if and prices the the with end. low into overall us higher get

Phillip Yeager

think see impacts but call a not short we your anything there, the of the term out. did And on day question couple with that we'd I weather on material

normal just for think I that's kind QX. of

some whether it have to going or month shows another. challenges, in up You're X weather

really in So not built there. anything

quarter-to-quarter, QX, still then growth earnings. maximize very demand but And in to see a we we're on to have hard a to see pushing ramp the

we that factor always and think swing out enter point March talk New is we Lunar still as come QX, unclear But frame. more I Year. a about on so -- to have at how of little we'll in time we're this a big

Elliot Alper

then see little to pricing? you you're on year. can I I to more a and believe this Dedicated on give Okay. mean, And color the side, spoke you expectations expecting maybe tractor Great. maybe flat what count

Kevin Beth

improving fantastic team asset has really been results our Dedicated with a pleased I've job efficiency. business. Yes. done That the Sure. in

increase per revenue I per think in XX% you day. the tractor heard

happy surge that. growth really some organic with our from We're spring seeing really really, demand and existing customer nice base. So

having needs spring that surge. we're significant pretty hiring So to support some

So that for could if nice a upside comes that to us. be fruition,

I as won't think with have sites headwinds from big getting for new a start-up business really customers to a good the some pipeline. existing new as any customers continuing doing grow job We new backdrop We're demand online. well don't think, first we in in some nature. costs, frameworks the show the start is that pretty long contractual locked But and are quarter, as to come well onboardings term quarter second online. into that pricing in could up

So, likely seeing think feel pricing good in now. right up I this year. very Dedicated And positioning our we about

Operator

ISI. question next from Our Evercore Jonathan comes of Chappell

Jonathan Chappell

Phil, kind XX% this half up into second I but half think and really the single-digit up. you've increases, low guide his when a Kevin we back can be of one over said last flat, going of pricing already is X kind months. little Volume, bit, January accelerated details, to gave

-- a high slowing more that I'm mid-single or So whether of half, the and then kind the Is first do back to lower or head? be half change take quarter the of to Intermodal rate of of kind expect to And sorry, expected we in year? double that flip first volume do you -- for it's or pricing still go on commentary digits the digits? the its it difficult comp,

Phillip Yeager

what we're I guidance. anticipating into the the overlapping and Yes, see we difficult more you high volume QX got full for that's higher we and single-digit built it. comparables, would then year, QX, comps is Yes. -- and

Kevin Beth

volume Yes, on QX much lower comp the specifically side. a is

got you that right. So,

Jonathan Chappell

Okay.

first concerned, season the I as still know far is in it's of February. early, week bid As the only

the first guys You XX% is half book noted to in be of the repriced of 'XX.

we're the mentioned that of middle it contract missed especially this this the of market and tightens, year, kind earlier, part maybe into fears Someone in by too, time of the the appropriately you some the market, truckload season.

price much So kind the kind still very there XQ XX% of first any in bid lower in chance season? not XQ? the of stuck way market split is into of the book you're with weighted? some inflection April-May half and can a there's another to Is you get between is that So that this year so for say it next

Phillip Yeager

Yes, that's I the bids couple Yes, typical in quarter, the typically and later of typically QX bids for there's majority frame. And near a And -- March. the implemented there things are mostly us. be the the near of then the there. May/June dates think in you effective see QX, is be time end will

bit of lag a that. little a effect on So

we'll think get opportunity. I do So that that

I of transparency for think good other beneficial or though, hear want of to is around just what dialogue generating our the and network right we're business and them what's whether regardless that with constantly constantly working to us, it And highlight, having assessing giving we piece, framework, customers the our and we're returns. that. book is working to is for

certainly parties. to have and with offs trade valuable for to with if both and the So higher we book. us be And discussions yields, we ramp coming that's constantly see to them conclusion that our customers and we assign a will will a assessing freight in really truckload market, there work come beneficial at inbound is

Operator

Ossenbeck of comes question next JPMorgan. from Brian Our the line of

Brian Ossenbeck

then transloading? of International of pickup maybe seems was still peak you give little tip a of but first forward, really was more more you bit going start So you to those mentioned it's meaningful see pull obviously year. strong to a It part for to -- seeing have and any the on into pretty shots domestic but that into of this season strong. a while started the transloading? like over things Are you

Phillip Yeager

see an international in is we're I obviously you, likely we think that that would activity be watching Yes, West closely. that. tell strong, I seeing Intermodal Phil. be is seeing We'll this indication Brian, surged demand will that are QX, transloading our very continuing. which is Coast but Yes, obviously, ramp, volumes people and very to continue

lot But So transloading very very, continue. right feel of now, volumes we there's our it yes, we hope West to are strong. activity see a Coast and

Brian Ossenbeck

does buy it And when going in you how drayage. not more with to look of said boxes, about of total? for I I in excess percent like you guess, this system, the do terms and people you with capacity capacity think many what year, any with boxes know you're as but the a have

Phillip Yeager

Yes.

So with take growth. capacity still incremental to boxes, we have on XX%

have utilization -- we through what have we turn just good We but and about also stacked, that's time and that. improvements, feel very

So likely we where be purchasing to not years few going feel a actually we that have containers. any we're

positive. obviously that's So

very on were In on XX%, drayage On really side, fourth to we've number. the we're that in-source the the start good focused but we returning to hiring. had XX% year a driver quarter, drayage around

there and have some more continue take So opportunities in-source to we that. to of control

overall position a from and very a there and able as and head approach very to methodical quickly to position. the company market then that We've efficiently. we're count, feel run good the just office rebounds been be our managerial move also we think And I in in

Kevin Beth

add there, on stack a of containers. the things is couple to Brian. One Just

I employee, efficiencies. -- handling think versus businesses, excited. over they're a loads last measure had on the to decrease increases stacked how and [ year. of of each many And we Across We per we've then, we're of those. little give the very what color we seen lines our XX% So were on in ] each board,

and we we've team we off, think our So has providing that been continue that to see been that efficiencies. the paying tech

Brian Ossenbeck

bit that of is stacked, lower still to percent this point? In fleet terms XX% the Or little of a XX%? is the maybe around at is

Phillip Yeager

No, to it's higher It's closer that. than XX%.

and during goes of had So stack. brought revenue. We as down peak surcharge the we a know, restacking support quite to demand some of lot you QX still some towards that bit the have offsetting but a that

Operator

from UBS. question Mike next Triano comes of Our

Michael Triano

is Triano Mike This for on Tom.

remarks prepared for the in conversion. mentioned you opportunities think truckload I

starting improving So just truck inquire converting in for the about the recent tightening market and to volume demand customers wondering, more intermodal? truck maybe, with to are expectations

Kevin Beth

Yes, absolutely.

customers with we as that for discussions well. of to giving board. conversions enter lock constructive confidence proved product in capacity. think during the resiliency But the lot as really across really bids them the clients having our service are that's Beneficial, whole and of obviously, our [indiscernible] our We peak, I on service a to and we

service, quickly back our get and partners that events, at some the and that's look of building as the some as then our customers. of you fluid rebound dealt weather resiliency when think well with I the confidence ability and that influx demand rail to to with

it. there's strong there's differential, yes, product but in, there's a the locked also service so And capacity price behind

Michael Triano

Got it. a levels. inventory And follow-up then on question just

balance, kind remarks think, are think prepared I activity, sales, we've been mid-single the low unit of into but strong of that like to you -- kind back had in digits. pretty up import I they're mentioned

if I'm there might some just wondering widespread it is And builds how taking you're customers, from So be? place? any hearing just that inventory

Phillip Yeager

No, this that we're not time. seeing at

of some impetus think are consumer that But anybody of tariff pull don't I bump. watching to up might think in I be customers strong our situation building is most anticipation the forward. the

mostly, to think to been into I trying inventories back get rightsize they've balance.

to nothing on report quite no, that So yet.

Operator

Our Shanker next question comes from Morgan of Ravi Stanley.

Christyne McGarvey

know just to This digits. mix the you look season on might little Ravi. like first Can you from sort mid-single of but been walking sight is seeing want like? of parse what line in brokerage what I the also have McGarvey and up business. particular, unprofitable that giving volume some of maybe on LTL away anything strong, just one, you're sounds just for touch terms volumes, for I my bid Christyne that's more of it in a you're kind guidance, that out think, there bit in to

into of do next how kind year? those in layer So

Phillip Yeager

question. Good Yes. Yes.

we nice volumes, this We improvement in a did of a So our LTL volumes lot year. job. had really

of was are revenue of it's per mix a which is we part anticipating I a a there. headwind bit headwind. load highlighting we on So a little Obviously, just basis, why continues, have that, that

strategic of with some seeing we via need online the We in in to routing are guide bid. We the some relevant that brokerage come sure wins customers. stay make nice our

and see really market we as project we're the So themselves, call. present that opportunities first spot

opportunities as to But that's lot a season. all our focus partial excelled, given than see wins are bid of I getting where all win. more those resilient only Highlighted continuing in dry for that's but early refrigerated, we're so we a and been us specializations big are business, been well. [indiscernible] and we've our And and truckload, areas think LTL, to truckload

also on remain. that a market, I just quite would if in brokerage just inflection entire stock highlight my our view, [ sequentially is see we And ] -- from that year, an tightness say conservative. guidance It through in QX there pattern the is, the basically and

to if see strong we some there's segment upside So that. Logistics

Christyne McGarvey

back staying return volume, like Got to easy thoughts guys you it. that downcycle is my back I you than trucks of the rate to as shrinkage space provide for really I'm That's maybe the on inflect, that's of but can curious add existing a follow-up, market a well at conversation. operating there? think couple -- when to more does Since happens? And it that has of for issue does leverage more of on but to been bit seem if the this helpful. a not And an downcycles, circling do that a does cycle contract? DEedicated How an previous additional your typically

Phillip Yeager

is Phil. Yes. This Sure.

set based that, And over sure make a it's So with driver right? on as to those wage, mostly and time try part we those are contractually move of that inflation. adjusting contracts we

contracts. long-term are those So

upward, advantage renewable, As come if of -- for they able to market moved take obviously, we're up the has that.

up we'll the And this, downcycle [indiscernible] try renewal a sometimes in to customers spot market. when they're for like

So we've job done a retention. good with

I well ourselves the providing, our we're really bring there. certainly ability service is positioned our on think to with capacity that and customers incremental we've

more to actually that allow markets we the think about opportunities So in them into people more good will positioning on some we bring new if with, to and back well, growth, and We revenue upcycle. servicing to will bring Dedicated, push us and keep really drive capacity support an us. feel them along

been So performance with I've of pleased that the team. really

Operator

Zazula next of David question the Our Instructions] comes Barclays. from [Operator of line

David Zazula

maybe think the period tried you on my Which more price just in a guys If of some back the and it's and we falling, the well you holding was Intermodal and than in to a volume. aggressively perception, in line got guys started since hit my done a when it recollection like kind as rates seems maybe volumes corrected really result then. little

on as and drive build trying pricing So up, of talked and pricing that starting pricing does call? protect forward? kind the your of trying Phil to more lean turn, the moving margins in with thinking had cycle decision strategy of thinking, you beginning you comes about that influence to to of Are towards the volume the Are utilization?

Phillip Yeager

Yes, a it's question. great that --

focused upcycle to I yes, do efficiency that's far an increase But or have in could raise that why -- finding feel better are an for very right opportunities service in and we costs incumbent expenses. pivot. and are as haul driver on productivity add is very the good it to certainly think we protect which is that. positioning the volume it's providing are to the ability in rates are network aren't lanes, productive have that -- into mentioned, start though I entry the lanes And head network to take levels, driving business, as incremental looking don't now, expansion as away that that we or we made yield

David Zazula

I bit some And environment. then a sounded mean, as talked the a little follow-up to you -- about that, like tailwinds in backhaul it

and the can As the I and tailwind costs a potential out of back network get utilization further the a just that if your repositioning balance network mean, becomes you -- balanced, you to is maybe less more have are factor. margins haul? on better

Kevin Beth

we of us. damaging up and Absolutely. strategy, that, network. have we that when you found lost market tell lot a where a focus for wound we our it share, I shifted It's bid our is would constant

but and and So our network. driver network-friendly loaded not utilization the business in that we continue drive creates into [indiscernible] with miles want efficiency to our only It productivity also to there. repositioning costs,

us really that extremely sure western really with the our have So inbound to of be that where in. continue outbound support right efficiency, to California the we portion drive be a is important to network We'll yes, and it market. now, across make in local continuing it's will targeting East to that in we biggest factor whether rail network that Southern shorter demand. board -- haul the the surge and But with need is to factor

Operator

to Thank would remarks. you. to now back the for I closing turn conference Sir? like Phil Yeager

Phillip Yeager

are Great. answer any thank and so time as always, questions. your afternoon. And Well, you for I much, Kevin this to everyone, available

time, you So great we Thank you. hope evening. really have appreciate a your and

Operator

Hub you joining. Ladies Thank and concludes for gentlemen, Group. conference call this with today's

You may now disconnect.

Hub (HUBG) 6 Feb 252024 Q4 Earnings call transcript