Knight-Swift Transportation (KNX) 25 Jan 232022 Q4 Earnings call transcript

Good afternoon. My name is JP, and I'll be your conference operator today. Welcome to the Knight-Swift Transportation Fourth Quarter 2022 Earnings Call. [Operator Instructions] Speakers from today's call will be Dave Jackson, President and CEO; Adam Miller, CFO.

Mr. now is meeting the yours. Miller,

to good Thanks, full update for plan on and the year related you current market share guidance. everyone, our JP, to quarter, fourth our an topics we XXXX and joining Today, quarter thank call. of and afternoon, XXXX provide results the conditions discuss fourth earnings

We investor website. our have posted are on slides to which accompany this call,

PM Our call Eastern X:XX is until scheduled Time. to go

We will to able Following Instructions] XXX-XXXX. our question these answer time restrictions, as (XXX) related we to time may you your not as commentary, topics. answer allows. will questions to due we're questions to call many [Operator If get

To information made of that and uncertainties States Actual Factors a differ. X and that conference contained the the Investors may begin, disclosure Risk assumptions United call of the presentation by in SEC XA annual directed operating involve refer may future company's risks, difficult are XX-K following. on affect are to contain with results Form risks forward-looking the This the of presentation I'll company's to on company statements discussion the Page and predict. to first you that the filed the Item X may note for Part results. or report the

adjusted while fourth at this our $X.XX, by X.X%, share for And a by diluted year-over-year on results XXXX on quarter EPS XX.X%. now excluding consolidated $X. Slide surcharge came GAAP to of were revenue Slide declined and earnings chart operating fourth per basis. on adjusted X; X quarter the in income and earnings compares our fuel our Revenue declined

adjustment $X.XX actuarial a of year-over-year earnings. pretax carrier peak a negatively a absence charge, included our negatively impacted holiday basis, iron insurance EPS $XX.X On for by to which volumes lower the business. in risk These in season third-party insurance million an related impacted results

for the operating fourth our to the periods year-to-date quarter, X segments. and in the largest fourth Now our their revenue each soft Slide income and proved on next unusually slide; of ability adjusted segments illustrates to quarter an efficiently. operate In

while operated Our the the Truckload and mid-XXs. low Logistics in LTL segment stayed in XXs,

Our by the as truckload well below quarter better typical was service of demand at capacity greater impacted Freight as availability Intermodal levels. weaker fourth seasonal demand was in well patterns.

subdued demand While expected. was freight were spot as opportunities general very were projects softer and than anticipated, infrequent

the caution believe where last inventory this existing driven to from We around the largely income and back overhang arrived in inflation ongoing Weak holiday was on some segments. retailers pull-forward most XXXX, year further goods what could was while demand. general pricing, in by headwind season, dating and pressured late for expect products a operating earlier too an volumes demand consumer

quarter during fourth of from other The of services. highlights from chart as X percentage the equipment of services, the right revenue our the our include on XXXX and warehousing maintenance, growing of leasing insurance, segments revenue our rapidly equipment which as each well the percentage

navigate on focused costs and operating reducing We service are customers tough improving as our we a to environment.

our and business services strategic our that to value diversifying partner and on work developing customers to continue We complementary carriers. bring

unusually declined reflecting few the year-over-year income strongest against of next a revenue of XXXX basis, with weak On fourth perhaps our operating Slide on operating quarter The ever X. fuel excluding each by XX.X%, starting will the declined fourth segment's slides we've Truckload performance, surcharge Truckload while quarter discuss comparison experienced. X.X%, an our

ratio. business with an the XX.X% softness and operating Our Truckload well operated navigated

in and contractual maintain the exposure reduce to committed beginning the freight efforts low operating Our secure spot XXs. adjusted an of us XXXX since ratio more helped

a revenue X.X% decrease tractor. a tractor X.X% in per driven per per X.X% loaded fell by miles revenue and decrease quarter, mile in the During

reduction the with combined tractor, business, insurance. ongoing caused income. Most Truckload cost in pressures The per decline and equipment, we in in revenue pressures maintenance operating inflationary see notably, our across

We take our in cost align the volumes. structure reduction with steps to continue to

group with diverse of strategy. us a dedicated services, brands Having and trucks, including nearly and flexibility X,XXX provides

have grown margins volumes on truckload top our year-over-year, over-the-road and as basis. business improved revenue has softened line dedicated a example, For year-over-year

Despite the at pool both this customers see still segments. Truckload expressed and scale, soft we our trailer to market, value Logistics our and capacity

are We advantage sequentially scale to our a extremely continue XX,XXX and which replicate. capabilities industry-leading to grew is provides trailer We nearly invest our in fleet, competitive trailers believe our already in to customers trailers. that difficult

to on Slide X. Now

Our continues on yield make and and initiatives. segment to progress LTL perform network well

adjusted For degradation a the despite fourth This XX.X% from step and we to LTL. basis at more last and demand basis quarter, a revenue quarter improvement quarter operated in an fuel million, XXX sequential point year for the seasonal represents softening typical down only $XXX XXX than ratio. was point fourth third the operating a surcharge excluding from

to fuel revenue acquisition This connectivity months increased at and existing per MME creates our able less believe Pricing The excluding to as surcharge hundredweight quarter, as well the both complete the fourth relationships. customers of company. us the new integration remained system maintaining each brands additional while this than culture and the strong as during customer for were services create of We XX.X% MME. AAA Cooper XX positions seamless customers to since year-over-year. leadership provide

in our will national large Swift LTL shippers term Creating cases to deal with to who opportunities have providers. long support further capacity. term deep in short truckload larger enable with customers network and network super-regional us a with and find the Our in the existing Knight brands LTL relationships many a

Now we'll X. Slide move to

also XX.X%. to adjusted Overall, spot decrease ports. revenue market rates the over of last quarter year. were segment the operating compared Logistics of Gross import from count well West driven lower XX.X% and was in by down XX.X% volumes, with Our per XX.X% lower continues Load by to load XX.X% an margin expanded to Coast in decrease load impacted perform negatively revenue in a a volumes XX.X%. particularly ratio

traditional services unload live which activity. we provide, pressure feeling power-only resulted the live in than load, volumes value power-only to continue customers our Our our less

Our allows network customers trailer and optimize to our their the space ability warehouse vastly labor costs. growing

and each reduces gives location, historically their that freight load access prefer them carriers be capital because Third-party them to and risk, their and unload able business power-only costs operating wouldn't and in. to hours lowers saves investment participate it

utilize this information will and third-party be continue technology ongoing the well have equipment. excited several more to as our and We that lead as business opportunities about for seamless carriers initiatives to customers will our provide improve more experience to to our that internally

by intermodal X.X% per better being load. are freight load and truckload decrease by quicker before and in count to general over the Dave. leveraging I'll to X.X% Slide decrease in Intermodal decreased revenue now touch on environment driven a truckload in turning on market. X current the low X.X% call position times Revenue and of are the extremely pressured the transit the service rates, volumes the spot competitive alternative. Customers a

quarter, network to between transit for the we the as future should service help and to These first leading rail appears business. and the improving times this intermodal growth more and predictability Truckload gap close enter support be within Labor improving our customers. improvements for

Dave. I'll now turn it over to

leasing activities. Truck you, the warehousing that insurance in X maintenance the the include equipment Services growth Adam, Iron as brand segment, up non-reportable as illustrates afternoon, and Thank and and well everyone. which make our under businesses Slide good

For year-over-year we in year of XXXX, full reached million $XXX revenues, the growth. representing XX%

increase revenue XX% a year-over-year. had we quarter, in the For

services adjustment fourth by operating results negatively As were third-party insurance impacted for in actuarial this to an the business, $XX.X related in million loss of other the quarter segment. carrier the previously the the which million resulted of risk in iron mentioned, pretax $XX.X

expect coverage results enhance bring to in insurance steps that our increases we of with various a taking expectations. to already cancellations. a collections will applied are more to timely We line improved which program, underwriting lead and lines recent We've will to conversion that new platform rate include

the have practice equipment. environment tremendous These XXXX, small insurance the observed we and service their carriers, help of of service structure. later through improve especially found their impacting interest carriers extending as their maintenance cost the intervals difficulties, pressure seen in But offerings them on these paying premiums have from as weaker we

time We supports believe and continue services expect our growing revenues diversification effort this ongoing over and these income objective. from the to other

of The our industrial on Swift XX; slide Slide percentage the from progress left Knight the and shows income intentional XXXX. business illustrates Next services composition our other into and to company. the merger operating segments changing the the of each on of our adjusted an growth since chart of this in the of non-reportable

us We're mitigate truckload volatile pleased the are a contributions help report through efforts These we in meaningful to earnings each diversification from downside us intended make will expect and cycles. freight company area. to less

full coming which Our merger. XX% we This XXXX we from approximately significantly million Truckload following percentage Truckload million of Truckload forma for of of earnings earnings is in our reduction our the in year and a shift now earnings consolidated pro $XXX the earnings a has Swift XXXX Knight achieved $XXX improved combined where while represent from were to XXXX. from earnings, been meaningful

The on right the the per adjusted shows our earnings share annual since merger. chart

per has $X.XX quarters Our to adjusted moved EPS the per share share in in XXXX. X $X.XX following the from merger first

of shareholders in down and cash $XXX a free million increase XXXX. X.X than less dividend $X.X cash opportunities. flow ample and Slide Moving and cash invested worth have provide strong with remains flow M&A XXXX in shares repurchased driven the $XXX leverage billion acquisitions we've merger, and in to generation our used Since of to the merger, Knight-Swift capacity ratio debt we've by leases. paid to XX; Year-to-date, Making earnings in long-term priority, our strong acquisitions. us increases since high our for million $XXX XX%, reaching million

is acquisitions, debt. purchase sheet pursue increase organic balance invest pay positioned well in and/or Our and more strong we're to shares, growth, down dividends

cash maximize We to shareholders. are our for conditions evaluating market create to our of value use constantly

which on measurement we return XX.X% on tangible achieved key remains a In XXXX, net tangible we demonstrate net XX, Slide return On assets, a for assets. us. the

key Our expanding this acquiring improving less businesses; in our operations. X our goal businesses; three, areas: and two, focusing on and is growing measurement to margins existing improve asset-intensive by

in truckload areas competencies improvement continue they and run. opportunity in to our that and synergies shareholders asset-based these have warehousing in to brokerage. or generate we truckload key our will our than focus us every in unique less the achieved allow believe will leverage us of are long to We've We returns acquired, truckload, objectives X business significant be core to

XX, market outlook On conditions as XXXX. Slide provide we an we begin for

on rates based less will will rising environment equipment, soft working combined XXXX and through half ongoing indications in maintenance and softness the quarters. through their will first overhang. accelerate in capacity insurance from current on attrition coming the expect carriers, especially of This inflation pressure factors inventory are increase interest smaller well-capitalized These We with likely that shippers the carriers. the and most persist

Adam to back it cover turn now to XXXX guidance. I'll our

Slide last here, On to XX. our slide Dave. Thanks,

expected largely we the expect For range what strong see half the challenging expect QX freight first typical is the adjusted the happened. we more in XXXX, peak of half, in to to in year $X.XX a be first off an full year, In before cool opposite: a recovery be environments second to to the $X.XX. to then we more XXXX, improving leading EPS we to and which Last demand, season. up half start the

Over-the-road until be latter truckload of contract will few with noncontract year. the opportunities pressured the rates half

result trending with noncontract expect in positive combined to return peak in low to QX. by per QX. positive digits inflecting in digits rates in single opportunities, single to year-over-year QX We of high be and down some Truckload revenue mile should mid- these be season Overall volume,

tractor the Truck year single throughout should middle by rates sequentially the of year. positive in with increase reflecting year. remain the for digits the the count Dedicated per stable low miles should year-over-year

to Our with revenue is LTL slight see improvement stable relatively expected margins. in segment

per Sequentially, revenue load the year. throughout Logistics first in increasing before the quarter should drop sequentially

compress XXs. volumes up, market picks as a to into to expect margin high OR the follow climb pushing trend. to will low the similar We Gross XXs logistics freight

half. in before revenue first improving in back in Intermodal the per will load the deteriorate margin again half

operating expect our Revenue by the increased to in in will income and For increase improvement mid-XXs. the insurance warehousing. services in op other driven full the and new in customer in ratio growth be volumes year, business and primarily we our rates

to were the quarter expected to expected quarter, decelerate and will equipment is and projected of of million million Interest is expense is rates in are per we range increase around also expected improves. to pressure and rate our where as labor XX%. continue range Inflationary $XXX in $XXX the $XX million, availability $XX fourth the tax to climb. be in our to CapEx million to to be from loosens as Gains be

So that concludes our prepared remarks.

And the questions. so now open we will JP, for line

Your first question from [Operator of the comes Jack from Instructions] Stephens. line Atkins

seasonality on about but could guess a to that How bit given could If was our would that trending fourth the curious first sequentially? of there. I expectations I'd sort XXXX, your you maybe So help here. peak. But quarter to of a us of anything two-parter think you point, Dave, quarter if quarter set be the maybe kind comment you fourth

guess, a I the and Well, follow we your first you I kind fundamentals about on to comment year can then, half? up items, their businesses. the trends that And in see the in trough of customers those just are what to about telling in it. your of the of guess, we're back two confidence of freight just sort of If you to and could think expand build the I'd appreciate giving that what's on you second half kind going trajectory

I significantly And we lower from would this as Thank that fourth we of what to -- through one January. go to say the show the first, used market is step freight say we're where here Okay. signs you, get would to. life as down than continues Yes, is Jack. that I

And seasonality into quarter, then would bit the changes first. so mirror which the see rearview typically, quite in in a you moving the the of holiday fourth with

might But the first fourth, do the first. softer this they good always to are. we'll look after a to been complete the than expect benign from We chance there's sequentially quarter, be fourth that back, first most we a seasonably change the and have

arrived. much inventory I us will quarter, fact holiday gives would some indications play be had their in customers maybe that say out from of would already that of some this the so the fourth how of what

XX the it arrived missed months has or of already It of around. before. just holidays. sat kind XX barely It Some

in it by already October started, had So fourth position. the seemed time that freight largely already and was the -- quarter was arrived

to explanation us. that sense So made

general was they has naturally, question this -- have next spring, customers we of that get to And by us that to freight caught mean makes is, this time the long unanimous from so rather that consensus, us by was things given overhang. And normally well, flowing the kind And been inventory almost it got to time are inventories, how about up. their going or continue given XXXX. through sense. the have our I are feedback summer of you -- the

So throughout the traditional on wasn't the summer, delays imports. there

And this early. the import here volumes so has and came definitely the that idea freight support already been

of we'll as first normal start softness we of what we this moved, expect a back two freight and is the already that's that So to move then quarters this cycle. through into year, see a result more

had that And consumers are quarter a It's hanging in that fourth in didn't there. And everybody uplift. company, has been have performance pretty Certainly the seasonal trying to we've to out. seems kind have the remarkable industry. performance as that figure of it really our of kind the an that remarkable for

has -- the really that I of cycles. think previous it's us evidence in oversupply it tells rushing lack came in or of happened normally

that and good. 'XX of or really in because see 'XX We just didn't 'XX most 'XX was either in

first oversupply. the a had we environment, still just the very healthy of didn't and 'XX 'XX 'XX, in see half we So when

see is I you partly put a of was operating up so business mean that's think year XXXX. I past asset-based fourth our And a XX.X% fourth peak peak. quarter the Truckload in ratio an quarter that why

And how that tight wasn't so but it supply of certainly, is. think really because us tells I demand,

we'll be flow supply going there's summer Jack, of call and back half inventory, burn this year the at normal -- off goods when So of that, a through forward it. you without that we're come, think our to fast the the flow that you incremental expectation back it, to goods

we a That different confidence much next leaving, that over quarters. back two environment the and believe XXXX. gives leave continue of half see is supply leaving been will we'll in fact, the us In has to

at just that, be for of mean And add to I it's typically to quarters. Yes. just have unusual trended, cycles Jack, to looking historical down rates than X data more how year-over-year for

positive. rates that's confidence what think could I fourth looking inflect at year us where this of gives quarter in

And had just dialogue shippers fourth the many we've think change in of support quarter. first they nation, customers. even I the and those dramatically and a of the with conversations the pretty in lot largest CPG the retailers nation. are buying how of habits independent the into Many would lot in our their largest a of quarter

all to begin patterns in to ordering But conversations, begin those normalize is that volumes pick for up see and to expectation June and the those really to those into mark. July

discussions our So looking the I customers. think with it's our own also just through of so not -- view data and but our then only market historic at the information

Your next from line UBS. question comes of Tom the from Wadewitz

you to to cycle just current out. angle another are this I the may of talked you you downturns? on in in see and the it about shippers compared question, freight kind topic, why but first on the how that differently behave other bit do there downturn reasons your response playing guess really Dave, a think

fragmented. I It's to And pool sense mean truckloads around or of industry different my if behaving shipper to large largest differently. a rates is just trailer get highly behavior could behave trying even behavior players maybe I'm a or like the downturn are bit there's carrier is the but kind a differently, partly hard not of on get different. bigger arms be what

question. the So yes, that's

Thanks question, for Tom. the

contractual pools So the demand historically what than rates cycles hung a we've different maybe thing there out have I behavior from been. stands one in seen for is would and that that's has previous how say trailer well what

mile. that business is to I that well showing see rate where on our our held in per think how you we've up

anticipate we Now months, advance. ahead of we're market in the quarters schedule anticipate how months XX course, Ideally, many somewhere and and X of in plan. between the we try many time to all

moving you well spot market. see And that, we results. were our time increasing And has of in served commitments so away last as the the course, us and clearly from this year,

look have example, probably but Logistics more you remember, but normally, a despite you our little large that such when the -- be were business, to be when flow little other an loads have way, almost volumes that asset-based the you there And XX.X% got XX%. you business, a had support also operating support business. that a business, fact bit going ratio But load there's to at would might one Logistics the for down a

and margin XX.X%. you look volumes, our were power-only strong, our at But gross down be XX%. But continued to those very

There's break customers been on to firms I more struggling there's margin, think volumes, there. able with the other We've been even. So because value some to enjoy when, opportunities nice create that's value giving we us would are logistics I created and to say, pool. hold trailer that's

So I think connected. those are

I see that on our we that clearly things. the see in of logistics. side asset-based We think

predictable. And do go bit so that's to I of was that the kind think of very -- pre-ELDs, I back different if playbook little environment mean, behavior that's past. this different a we in a a for the

You would they could shippers cases, and non-asset-based would prices many in market. They would brokers rate that discounted there were difficulty haul declines. to in come at willing towards those, move any see would win anybody large would execute. go offer, volumes, that who massive the and in and the carrier then double-digit find that very were would They given do people

of carriers appears effective those regulate figure ELDs we that that And service out in some ELDs cases, the enforcement times. difficult have hours and in today, are to Well, didn't to alive which more in many rules. stay maybe miles have would smaller run of how it of

can't just extend go the day. you So

you're can't that run to more making as maybe up for You much. the miles make fact not

it it for and out how within stop and around trailer, and to unloaded they trailer they're group can rely shippers, that can't -- And to driver a doing figure truck And loaded hopefully X. the live be a up. to to warehouse a they show can what day wait a and us just as likewise, flexible has to when the and they drop opposed unload have our to to live on get or and

even to ELD extend And than compensated can't smallest the if you're And you two where world detained. so more they be be this you carriers have of for if that. have to hours, if the in day, they're detained paid will,

economics And the so tremendously. that changes

from why So pull of it definitely and creates through. seeing we're I couple think think are -- just a much that those reasons we so value,

but And the consecutive is speaking. if very industry spot of much, at rates, broad rates, rates. That's steep that's that somewhere a XXXX. single rates think over group not to are months us generally rates you those whereas for last months the spot a fragmented mid-single-digit in every never I data, a look contract in based on down just find happened of not of what declined have some XX very XX such industry, for decline month you'll

a showing I bouncing And bottom. of so debt a bit those signs kind bounce, if the you of cap will. they're rates of now just maybe are mean along

we near bottom or Tom, on inflection becomes, at rates those the up to when point. now we're the And when crest start and spot do see So the question do rates.

and If that you or the look contract came XXXX at of inflection hit from rates. of August XXXX, they cycles, XXXX, by the and it August they were the of and bottom last then July then in down. through was through spot And peak they their spiked in back point came couple rates

January then started bottom, which rates that up before continued spot consecutive mentioned. is a post happen ELD when officially months, June, contract the And rates July of is when until Whereas XX they intersected decline XXXX world, and came at to forward off as the to were the saw I those XXXX, they spot we rates peaked time. rates in of this in move the for higher

pools. to And think not spot are is begin rates. to they of way if rates poised to and an ourselves the now we to rates, back we have once intersection where a intersect, started know but positive enter part And what really start have up see those in contract rates held their make spot positive have not point. trailer now in only contractual we period find spot rates due value rates there, probably those to off, in And of come large I so

everything do carriers trucks third do question until And which degree that their that oversupply I peaks equipment you you for consecutive to many don't too still what trailers, demand economic go and long has purchasing becomes, And do buying broader by allocation. then and I again? tell year, to with will new know, is the, how the fleets on

the higher is nothing is free-for-all. for to much And rates. a say the not of So cost impact interest it

Tom, probably for that question, So was a a XX-pound feedback. some five-pound answer but

Your Fowler next question KeyBanc from Capital Todd comes of the line from Markets.

to parsed an think of contract then that working do out as the How inflecting -- just the Maybe are But model side? renewal mile have touched year positive, now pricing thinking spot? the And kind we on and on that this assumptions on this you contract for high up commentary start about you on what Adam, the declines touched how is revenue through seeing between the year? right and and on for numbers and you I response. a through move pick revenue to first to question. Tom's the you Dave, bit per your little single-digit the

Yes.

I so half there's this sorry, think in expectation spot or opportunity first the Todd, of year. -- in very our little Tom, there's --

a of in the most still many too so bid contract had early And season, haven't and So we result decline that final awards. of on will be it's renewals.

we have are those actually than declines anticipated still received. what So those more more -- are

early the in still our we're so having of that and customers. good phases with dialogue And

or improving typically fourth the of improvements the our some rate the in from rate come back but some in then quarter. in, is participate and then more renewals, spot projects of contract And the expectation in will that year, less half we of the the

And Adam, on just a that comment. follow-up

mean, spot spread contract? between side, contract what now the a the contracts given year, for on is expectation So and just reasonable right I this

out we're still it to Again, of Yes. kind bid. the filling

a to of renewed customer. don't the put depends, -- with right contract Todd, kind that understanding on it number still We're So on we when that I want now. really

the think digits reduced. gets number parts the bid be will season, the of that higher larger. that digit. be as will lower double bid season number single progresses, And early I The

because generalize see network it to pieces into thing that fits continue for fact need in the and and the inflation. whole business we us how be still works it's just because Yes. hard how have our it rates Todd, to we to increased that of of

other way concession, if who's have that a rate cycle an a across-the-board maybe rates super-efficient and do are sometimes point, working customer trying the case. target That's a not in to have things We in hit when help are answer time opportunity parts not make budget or But was is automatically we to where this a an that to perhaps, renewed. Adam's the the down. just the goal

in faced Yes. Because hedge dedicated alluded David's have an we're of have think what mentioned think environments. environment that's, of these differently I increase think I that that's business, it's think, of some we'll I to our I -- And perform we because typical type and that when to, how with performing. and you a OTR dedicated, they

context. Yes. it's Understood. helpful No,

in about seem be would think fourth inflection for positive? that positive that which to trying the quarter, really expectation to certainly Just

comes next from the Morgan Your Shanker Stanley. question Ravi from line of

year trough on guidance clearly, step So and year now, everything take $X level. actually being I back the a on implies midyear and bad sound it, been above comfortably listen I were so and if really as inflection doesn't think about cycle just a it what to ago But a was like it this of about that that and kind you've cycles prior think, not of saying far, as talking bad. call the that kind else, you for you're Dave, EPS said, think I has your you a that to

'XX. seems comp at in kind the especially context, guide given a of that this easy in fourth punitive And of point, quarter kind that really you have

that need the non-TL some just get the of cycle and Or expected? some than what you've I'm to a lower of parts are be bull maybe you to in you what there the at of than number higher guided and of much takes thinking number can worse to like kind or So moving mind? the of puts case bear keep case kind that or a the turned out to in any the segments we are

Truckload full still earnings. represents the mean, I Well, of Yes. our X/X

the full the Truckload the moves gets piece that most. far the So -- that needle by is

to XX% what the what So first half less when would than be them of we expect at of we would to look our guidance be. that's the going year, for earn in annual

year, the So of half if in year. know back I XX% in front XX-XX, half it's of the don't XX% the the

just But to in will would to looking over that's that you But than share $X share. adapt half a back a Mary we like pure have hail tell a a just share. would a us would for countercyclical a trades XXXX, not earned environment. be be and it's cyclical, would more here total over -- not a And I a order for recognizing a $X way. to $X that a being stock more we're in $X accomplishment, us a such achieve earn $X at tremendous than with share tremendous on well, That get -- that react we based be that yet to cyclical

So it but isn't it our wouldn't us there. going to or be put there easy, we guides model

group happens little an LTL is what working that I -- that the factor yes, portion Truckload is the on full Boy, earnings. one that be nothing couldn't you we industry we mean that's more for with a side. volatility pressure, couldn't it's but think -- a -- us rates LTL and like we our feeling is I feeling that group. of see have bit just as happy of with the

we that, a progress. just -- to continue so business make us, And for it's incremental and

that's the an a almost to business a our a a into And leaders take Cooper there better XXX% that, quarter, out back-end successfully to the of that's so a where we're and business fourth able XXX-year-old of it, hey, touches at OR, performing to we little want really than XX.X% MME we factor that's bps integrate And that's system in business. brand company. a and with ago, be new that affects this to bit addition XX.X% that's AAA in XXX and the able were year were But cautious. a new bit

example, be synergies was that -- didn't and modernization has took and still use continue And MME roll will as in that it working to the mean this be and modified, business. so running tremendous an dimensioners, will acquisition. to I before do while out. we there at effect And continued the October to

And to so take effect. continue will investments made, have been that those that

over at And almost year-over-year with note, adjusted so revenue income I up up least that guess Ravi, I on operating that, XX% should XX% -- basis. a was and business

And bring out why geographically so synergies we in why of and And we're ways to still to and working course, That's diversification. it. LTL. between That's can have that's we that we continue to LTL. nationwide like a the fill And into we're find offering. country TL

us. help to And so will that continue

I to of less But to sure seems think, there's earn can Ravi, stock this at what's be than mean I I earning guidance people, of $X, that lot just look how tied a aren't that. -- a the if the and we lot us some

try have and but to done -- available we're now -- and terms our range that's -- hey, on the to the up based going is we best best feel So we've we just guidance homework predict with. the of we came be like information where in future, our on or

And to that quarter, fairly each would we're I into last detail going at guidance And to today. our Yes. not that But segment our need look perform achieve as of aligned guidance, went I there. to I Ravi, detail $X how in greater think think mark. we

a outlier capacity some seen better intermodal. maybe on We've intermodal. I that We the ratio. is availability and about the just versus service think mid-XXs that, being the challenges with especially operating at that the volume, there of one truckload performs talked

out But that be area I this segments tremendous amount what we our laid would everything we developed bid have so a last to as season, And would confidence speaking, cycles be have just have perform how these we'll on historically off out. And based having quarter. from how in plays communication would that still customers. will have with out one generally of but called our the maybe see and we're

next Bank of America. question comes from line Your Hoexter the from of Ken

guess, test follow which I thought? that maybe million. to million Truckload that there, bit to confidence -- $XX targets, $XX $XX mid little upper And some If $XX the on alone, -- talk a go I can sense just put the side have just -- the stress in into million gains, kind up million and you've floor. back would does to $X your moving the It in about I XXs got on the of to pressure could guess, to seems that specifically, maybe floor

on And guess, on has of the transition now how Obviously, issues, start -- I Union access comments to the mid-XXs the thoughts your I -- any that yards Pacific? then side, some that deterioration on on is intermodal Schneider -- mentioned know you or over they intermodal? can service maybe And if you had of better they to see kind getting the the been. service

Sure.

would difficult So question. in our about quarter. back our the operating that a then year of with over half, particularly Last quarter, environment, as and expectation And truckload being whole, into challenged in first mid-XXs. in talked dedicated I'll road year the which -- or little more would start Truckload and a quarter the include the sorry, the the that our business segment into be your for half second improving a the fourth the on I full

relates with it there far, been Schneider impact question, BN from UP. As your thus to conversion the from much to the hasn't the intermodal

know I I certain that there's improve And mean think the conversion. service. don't areas Schneider watch to our can I we the it's service closely. certainly we related where

of that across the with, with rail we've some our I think just kind of board. dealing challenges partners been the

have customers more to like our confidence But rail is I is available, improving, will think the that and rail we seen does have And continue fluidity improve. it seem readily that. labor

dramatically service certain where this improved year. we've customers expect think to large with I we receive awards

a low a the given currently count of be to I into half be think in. going able we're first still we're back year. that so to to half the of But of kind bit challenge environment the And build is the confident

just up guess, I factor wrap such And that swing you can right? big, Adam, Because range. in that's on on gains the a sale,

were in even Yes. first been meaningfully used quarter the small mean had off has last we seeing good you've And buying we're would where the the equipment which still has been, purview And gains that as market. got it slow into equipment, from they carriers activity. year. a We have coming not typically market as when spot

have that's carriers the challenged I because inventories think to OEMs I of continued have still of a their large age been And fleet lean fill everyone's result just And think the out. to orders. very most

And so used just equipment. limited of that's inventory the

that what don't so throughout are And we And selling is year. see still margins. healthy changing the dramatically we at

Your comes Subin next of line from question from Bert Stifel. the

I $X-plus Dave, obvious it's I about a guidance, belabor that Slide to want point, look at think tremendous your implies earnings thinking but XX, earnings XXX% which the I about expansion, don't if obviously feat. is power

Slide uncertainty look think I as people are so mind get your guidance you them? is would in to go their those If at And that. through the greatest where you trying arms XX say around in assumptions, I

I it'd that one as say. for so it's be uncertain conservative, data don't guidance of is of I more we our knowledge want and say than points the we mean tough mean, today. the -- have is of down I it's feel to it's today tough say point kind out don't with to Yes. -- to the we being is another. on want what aggressive. the this kind know fairway the best I guess in market know what look, based to I

that biggest. somehow Washington rates, be the with would if Well, tax messes

So we'll tax that rate. start you, can't there, close help at XX% Bert? to Does stay if we

Yes.

I the that needle. think moves Yes, go ahead.

rate weird per move. mile -- But about to peaked months sitting at slow. a big market rates here to looking a ago. we're things rate per -- mile. Realistically, Spot rate with per XX Obviously, weird, that's if not lever Bert, that's mile happen

already mean And I are this. -- so we well so into

you what's predict happen to you lot going if rates, things. can And so with a can predict of

our And result but that's we've and built as compared we've seen to so through to year folks. do the rate relative this a of business nobody go. also per way But create way going the that mile knows the value exactly we in how the things, significant other we resiliency

in so XX months. to peak to it. you'd often, double the in don't or any declines hard-pressed in you be went find it's back greater consecutive It's you hard-pressed be -- And just to over cycle don't see to other you I where trough mean XX find peak go don't find just than -- you trough and -- months. digit than see months. But XX you'd longer the

we're And was coming already of was this, by it months into one this and cycle an this oversupply over into like not other was. equipment not precipitated XX -- every

that can as expect glimpse year. us rates gives little contract bit that of so as back we the will rates both of we in a of in bit half the rebound And think little a spot well into what

that biggest would lever I that be but mean the -- guidance. the So arguably -- in be would

put my OR, do new which would And to from is comfortable bad is fantastic, years several high a Logistics with in I which get operate just maybe ago. a altogether in Maybe year. how low another it implying business way, those manner for you of the particularly double-digit LTL you different assumptions Logistics, certainly sort question because guess is Knight-Swift. margins, you're single-digit be

range out those played on in current margins, of their a least down In in would through sort LTL, form. teens at good mid-low this somewhere really both haven't be cycle, and really

those you? contract just rates So how ton models a I'm of not on I of for consistent. It's more know you've your not talked uncertainty curious, out? there sort are about play there's --

in and so that us less of connect story large the And full LTL No. we the top to come in does. some and a that's I have world. the kind in secular national industry. just And -- say a secular than of would more they much the bit perform just to arena can of story consistent what Truckload of what's compete it mean synergies super-regional a from with we on have could of I -- do opportunities allow going country just already. portions has there's the and on uncertainty the performs then

wages the you, is industry the go for a about up. And continue other I tell to probably of on of would LTL side wage pace to those increase that, X% drivers. are wages

full different than Truckload. or LTL in that's Now different

be And so I going you're their up think continue expense rates see to largest have to inflationary. LTL because continues to go to

biggest this just look going at reality $XX.X Logistics is quarter, needle most which our business, operating parent But billion the the I we're that lever. nearly in of company, million if terms $X the our the on -- that it. of income, it of recent grateful On volatile. is all for isn't Logistics But moving of one be Logistics, produced the entire that to isn't

mean XXs shift. front, that on the here add guidance, which we Bert, mid-XXs, I'd up low moving the And Yes. in do the we I high And note we from in XXs, XXXX. Logistics have accomplished

really look such anybody the compared strong be XXXX. for performance position the in a would you else If at very from to good we're absolute in just it XXXX, It's coming market.

something So expect up there. give we to do

speaking, in largest move know, I as loads That's there's is to your trends. hold And market. you in yet stronger going the typically market, less with that be and when rates. open volatile competition buying generally variable Logistics, purchase you're less you're capacity in Now too, cost those power-only mean, -- rates brokerage in the because are doing

than gross pure your live the So lot unload opportunities. a resilient margins load, more are live there

line Mehrotra Deutsche the from comes question from next Amit Bank. Your of

of another like I that do acquisition move of really AAA likely a for the had guess meaningful ones. this Knight you just is year, terms couple a like I earnings Dave, in contribution? of can quick to kind needle think acquisition how do it One,

question around X% It Adam, on quarter. in to to by Jack's in the maybe first in down really sequentially And loaded-mile by was a basis. fourth we quarter, we then, go the didn't look the at results, see probably Because it's be fourth down yield first sequentially. if to quarter I the quarter. want crack back And XX% going

you very a should of trying XQ? I'm initially, XQ comments that with not move reconcile to that -- much seasonal a to like saying So Dave's see counter-seasonal dynamic

we may see quarter. yield crack we first the be the didn't expecting in look I XQ, in Because at that if just

in just be given on profits to us from Truckload XQ XQ would actual could it help think helpful, just you expect I if that Adam, is what the decline like yield. you So dynamic frame

here an at ratio. sit So now Amit, perspective, from M&A we leverage right X.XX about

positioned well we're So to act.

the you priority that Those take work timing some time out. for one cases have LTL. right have is number and Our to clearly to in

companies. between in variety so of those, at And a we look

our to alluded last because to -- much attractive and had we quarterly we as in carriers comfort. us are And call, truckload so

it, an enviable with it, and afraid do we think, deals truckload We record we track and have, as well. that we know wouldn't be to love we

we think be the to So do both. able bandwidth we have to

very remain we say, would and in I interested, very so world. the active M&A And

we unbelievable And look big led at Amit. quarter on XXXX, to year, which there question, was second a XXXX didn't the $X.XX when spot I have -- this we XXXX a in projects, fourth $X.XX think into hauling have was QX are still almost QX, course. down, strong. share opportunities. freight I versus We just QX your the in normal mean step didn't I

from QX transition dynamic. you as freight changing so into QX, have lot And a don't in you that

have go quarter. the will the you're you then in progresses, bid bids Now quarter, probably probably quarter. through. early effective mid-third until that season aren't you're working complete some as second into probably later of you And second by But be many those bids

be where see to so hasn't just, down would see freight moving QX to have is The normal don't the I But Probably. the pressured you dynamic QX? normal going then that quoted. have rate you're know you is extent spot don't QX into again, the -- you in move from the I business, where QX market course. and step you robust project that to changed So you dramatically.

saying 'XX. XQ Are from XQ So than as down went -- to significantly but move to to XQ going less 'XX XQ adjusted it's XX% you profits in 'XX? that down truck be that basically cracking 'XX you

QX. profit say from same overall QX the step in from -- see profit in wouldn't down the same the down percentage would I step to for I business,

Yes. JP, didn't questions little great our and we to operator. your help a as the reach to apologize a Everyone, Welcome we everyone appreciate call Thanks, get today. directly we were ask hope thanks a queue half has evening. dozen more to who Amit. joining out Well, our to in for to. us than that

call. This concludes for conference participating. Thank today's you

now may You disconnect.