Knight-Swift Transportation (KNX) 20 Apr 232023 Q1 Earnings call transcript

Good afternoon. My name is JP, and I'll be your conference operator today. At this time I would like to welcome everyone to the Knight-Swift Transportation First Quarter 2023 Earnings Call. [Operator Instructions] Speakers from today's call will be Dave Jackson, President and CEO; Mr. Adam Miller, CFO.

Mr. now is meeting the yours. Miller,

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

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

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Dave Jackson few the into get a slides, I over want for we to the remarks. Before turn to opening call

acquisitions, create through full our the we intentional escape years value and the maximize cycle. This to Appreciate we entirely recognize by of cycles. our diversify phase we the to joining times, bottom to and our income technology for Thanks, the of acknowledging truckload the every that a good Adam mitigate downside streams our call. evening, for maximum and pressure begin customers steps in truckload I strong have business wanted Good strategy you to development in included of is afternoon. of the But everyone. to cannot performance taken industry. cyclicality that

When highs flow and in decade, pace sequential are higher that with increasing cycle dedicated for this less the cycles downward in of last part XXXX lows recent freight we perform cycle. truckload rate an of range now. XXs higher on looking operating strong pressure And cycle. most moving to over cycle, current major the this investments appropriate to the in again each enabled high are experienced market. next at in to performed for we've of the factors do from LTL cash LTL The make in cycle the challenging the market us advance prepare our bottom preparing have mid we or of where find than continuing already large is well the which the in the away been strategic the spot truckload in ourselves strategy ratio to and business in during

phase announced factors expect to as of high in correction. supply to us acquisition of again, one achieve strengthening another Xpress makes recently U.S. a the that the the be We for attrition way yet higher enables

our modified And later guidance. how was calculated. change on earnings XXXX have We this in per we'll call provide details that share

guidance first previous cycle below this quarter the experienced the than revised still As we near share the cycle, current trough of our is higher XXXX. of earnings per significantly trough $X in

to back Now X. it Adam Slide for turn I'll

Thank you, Dave.

unfavorable insurance and loss the party $X.XX year-over-year result diluted decline truckload spot during per declined excluding increased adjusted share Slide at segment claim diluted fuel in impacted On for year associated to pricing year-over-year premium our surcharge that basis. by of pretax negatively addition claims, and jury impacted $XX.X quarter business X, demand, as earnings move unfavorable EPS a by carriers. on quarter Revenue an within segments, we of insurance development our for frequency $X.XX consolidated and million the as lower throughout the and quarter, majority small share XX.X%. So an operating XXXX and or adjusted of negatively operating the quarter $X.XX. million a first These GAAP quarter rates and per while to declined $X.XX development diluted XX%, freight which results an our earnings certain income compare revenue first primarily our by large a we issues non-reportable verdict $X.X per contract with were earnings. prior were a our the results or in collection came share during the of softer arose the third within expense from

our Now environment and volumes, weather challenges, the let's and Despite navigated it our first adjusted pricing largest for as the operating of and typical the in X import soft by illustrates uplift revenue each a segments impacted move to income Slide lack pressure consistently March, quarter segments. low well. seasonal of a

LTL and XXs in produced segments Intermodal XX.X adjusted with largely ratio ratio. a steady while volumes. truckload Our adjusted logistics the was a operated operating operating mid XX.X while growing

quarter even and fallen a spot below rates already public Freight XX% more pressure volumes more spot the and put further demand, of the persistently softness by was Weak first the seasonal the had typical the the expectations headwind beginning income. pricing pricing ongoing lower rate drove on on demand pressured while soft indicators Various persistence and contract throughout inflation and patterns. operating to also by This quarter. XX% season. in quarter to bid serves end year-over-year the of was

include revenue highlights right well from as remain The and of our positioning from environment. as XXXX quarter which segments we party operating third equipment, of demand carrier leasing improvement warehousing four in costs to service the as navigate services. business the the We revenue services, and customers, percentage reducing first of other our for focused our our eventual percentage services, current on chart the our each on during of the the

services to truckload our value X. performance strategic that developing partner work customers on We carriers. continue segments business Slide and discuss we'll slides next to on few diversifying brings our The starting and complementary each with

year-over-year per logistics fuel served put a troubled spot to more fleet, operating the environment. largely of had freight quarter ad below was surcharges stable XX.X% and strong to pressure from of in which as our reflecting quarter rising asset revenue which the than pick excluding declined the on basis, expected. the X% business demand, contract of while of XXXX comparison quarter forecasted hoc we up XXXX, first a to income against last With some the revenue tenders weak coming contractual divert to and pricing our first the an and well, solid unusually freight more declined levels, combination On mile business overall enjoy

with and well as result truckload operating navigated of Our softness an a XX.X cost control, and business ratio the adjusted execution. strong operated operational

and driven per reduction tractor loaded decline X.X% X% pressures combined revenue caused with truckload income. mile, per operating in During the miles per in quarter decrease X.X% tractor. in The the inflationary by revenue per a decrease fell in revenue tractor

and XXXX Having volumes take with mile align dedicated flat to essentially continued brands flexibility and including us We roughly our sequential in steps services a of structure on was to diverse strategy. trucks provides and group with a basis. our the per cost cost reduction

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

X. Slide to on Now

Our progress business yield which income revenue, flat allow network LTL environment. to continues softer volume hold despite and segment on and makes essentially well and operating perform margin initiatives, to the this

Price operating operated X.X% For ratio. an and year-over-year. the million, remain solid surcharge quarter fuel increased excluding we revenue excluding XX.X at per fuel surcharge adjusted was as revenue, $XXX hundredweight

X.X% to Filling down in XXXX with and terminal as long acquisition network the a exiting the shows indicates short support national out in but future. locations term allow well were find day customers year-over-year into a our us to April. and network locations since enable new show the capacity. more stabilization The as regional to MME the in super truckload will us LTL term creating the and further near and freight in quarter per existing opportunities participate in Shipments the did map the ACT plan networks

on X. Now Slide to

revenue and which a a rates Logistics spot Gross at XX.X% quarter XX.X% of negatively remained in in by decrease impacted driven segment volumes, margins extremely the Overall year. than XX.X% from environment load the Coast an worse was an quarter. decrease count ratio ports. XX.X%. navigated point market West operating Our down perform a year-over-year lower in Load import basis by of particularly of revenue to load the freight prior the per be out first was of to with lower stable XX.X%, continue volumes soft adjusted XXX

where markets which also particularly disciplined great need Despite in pressure digit the our base and additional our support margins. on businesses. our our segment certain truckload drivers in and Logistics business logistics been support the nimble freight to double additional near maintained volumes, business complement asset has remains challenges logistics to continues This market, to only. put power a we

Customer proposition preference value this we will service be power once few exhibited the demand behavior only outsize a for an expect over strong recovers. the has years and past beneficiary

leading our labor to ability allows network their optimize industry trailer and Our the costs. own customers space warehouse

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

in segments actual both snapshot of customers’ of scale illustrate we trailer in On us the chain coverage at network to and the right to to with ability needs. the point our XX,XXX provides have respond we slide to logistic time trailers throughout an our This network. the a the truckload supply shown our distinctive locations extensive

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

decrease I'll increase Revenue turning by partially offset Slide call on X.X% driven load on X.X% load. per to the over X in X.X% count, by before in an increased revenue now touch intermodal Dave.

to position addition as are are and volumes yielding challenges, leveraging awards. better times to transit and known freight service Customers promising service intermodal said, market. pressured new activity our quicker the of we truckload bid volume volumes the the are and encouraged being in as well truckload competitive That general the sequential growth year-over-year well low soft environment In alternative. by the in spot the being rail current in rates, see

drayage more lower our In our and addition, success internalize costs. in utilization efficient the trade hiring fleet us more is moves, enabling allowing improved equipment of to

appears truckload better this intermodal improving, business. and opportunities service be has support see between While gap network rail help service Labor freight. need intermodal allow further the rail service improving, the to for consistently and close growth to within to more shippers should been future which for

turn the now over Dave. call I'll to

the under X Trucks Slide Iron and as Thanks. rentals illustrates leasing reportable and includes which insurance, sales segment equipment non activities. equipment, as warehousing our services maintenance brand and well

the from XX.X% $XX For revenue million, $XXX income to was million of quarter grew prior the year-over-year a reduction though a loss year. $XX.X operating million

seen strong ability seen our party the to segment of past insurance carrier growth While premiums. risk over our a the small few the and pay This non-reportable the have by primarily has in carriers meaningful business. a third of shift quarters we years, change cover two performance their past the driven insurance profile is and

inflation believe their underwritten. significant a persistently spot impacts than combined unprecedented businesses originally higher risk on by in put produced We over which businesses, on the the has seen past high price pressure their year, drop was the with had

point party is This decided segment, unusually we carrier be for to growth temporarily difficult exposure this the decision third business the a headwind As cycle for in the will operators. move our an in a we've trough it effective second but environment believe of result, this quarter. reduce to risk with a prudent small this at our start for to

Beyond we insurance improved to already cancellations. enhance include are steps higher this collections and taking program which more our timely pricing, decision,

perform in though will to services rate to in revenue are the of year roughly previous expected other half operating level. The the run be the non-reportable income drive for modest the continue growth and quarterly year this to for positive and return the segment later segments

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

Now to March U.S. acquire Xpress. on On to the Slide XX, we XX. announced transaction

for excited U.S. We transaction achieve have three us year We're opportunity impressed outlined leadership's been expect with in the to slide. to quarter. and this in express help milestones this close early third the Xpress willingness this

XXs upper and over the OR and the years OR three to businesses within in truckload for an Specifically, upper road dedicated XXs XXs low with brokerage.

low independently into is which better. the has transportation, to an truckload in XXs in and been and get carrier operated we XXs Jackson, assist already them Total even Mississippi or consistently expect the

Xpress years but do had see and engage the and and U.S. of incoming XXXX improvement $X since meaningful we've at have CFO performance opportunity expect to president has was group the experience to leaders. a truckload with of Swift Xpress U.S. confidence many this achieved We XXXX spent achieving in critical billion increased the of have much following revenue earnings our incoming work broader we from to only in and transportation, these made, at the in goals progress Swift The announced the Knight-Swift carrier. were merger, employees

Now indications stabilizing persist through delaying on inventory has could inflection mile quarter on first from to changed on later slide overhang, eventually on now and little produce deeper XX. XXXX. anticipate of estimated. start for and a Not the before a of market outlook This their cooler other through than revenue we per based and our the We updated than wetter pressure contains much that last somewhat with shippers since improving, on will Slide the be still and working softness weather season. XXXX the half expect current conditions initially

taking We have ongoing base. carriers carrier industry's the insurance inflation should fallen lower will especially well ongoing This operating and and soft now and that are rates tightening and of rate for rates combined standards pressure Higher on spot a capacity a and interest serve portion increase the also estimate equipment expectations capitalized large costs accelerate maintenance carriers. factors to the credit with below These average attrition. environment toll. less the smaller

the combination the shippers reducing third levels progress inventory make progresses, reduction year supply The demand more return volumes should an should conditions further as freight improving quarter. demand to and by levels. import begin recovery end improving to of the lead and normal of As market

I'll XX. Adam guidance Slide revised now turn back it to to on cover XXXX

right. Dave. Thank you, All

expect $X.XX, a our in adjusted XXXX walk now to We range to drivers of this this is guidance which be key the $X.XX. updated change. so understand change, the to is For plan we full of to we year $X.XX from original EPS $X.XX the through significant of

persistent digits compared single includes year-over-year revenue single projected more gear. now the will to result, for support double return opportunities low year. be this expectation I high as its our increase reaching dedicated QX a the flat being We still of peak First, on turning anticipate down decline project single digits to mid comparison worst quarter. noted on original to created year-over-year annual at as weakness in a to per volume in rate earlier, change single the as the We pricing. high for non of to QX. low we path in mile in the before expect We rates demand contract fourth this in some combined decline And digit to pressure has digits the that the the year season still with

insurance $X.XX that our to was and the produced likely on posted growing call in income is non-reportable meaningful operating in update XXXX. had the slow environment. and before guidance third the segment segments returning Second, the today. this be difficult like reduce no our half to what a in be of party initially the adjusted challenges slide within it roughly impact strategic decision services was to during There our this to to we revenue approximately XXXX non-reportable other the to growth trough are we from growth is changes result income in risk a in originally and from the to to business now What underwritten projected operating this be contribution a as projected earnings in our segments our

persist as compared second and on fourth, should seeing revenue range may remain on better to costs in in through initially And sale which logistics, the progress we gains now are projected at are the to remains pressure we slowing $XX in the remain and be many new $XX original revenue assumptions. equipment both reach of per initial remains historical $XX margins out expect of OR carriers prices in pace our to which and is per to margins $XX quarter of low refresh equipment quarter. equipment as equipment alternative. to a use for or rate XXs. expected compared on secondary guidance prices additionally behind per of The operating the million million supporting equipment as be quarter supporting, seems to impact load million behind to the Third, continued decline Logistics million

and little change Our other follows. saw assumptions as are

improvement throughout slight to with the revenue in will the load half miles segment year. back year-over-year sequentially positive half is deteriorate expected truckload per stable in per count first improving during with sequentially Our relatively LTL year the remain of tractor tractor stable should revenue the the see in back bucking half. Intermodal margins. before

in and to that in and expected U.S. the rate to as include expect mid remain of and our does range. to around pressure is decelerate to year equipment XX%. And will any XXs. expected CapEx $XXX Inflationary improves be ratio be the operating the For we full million results loosens still is guidance the The labor $XXX CapEx million Xpress. tax not from availability the

We appropriate update that or we transaction. required once provide will close any

open prepared the So now will concludes our line for JP this remarks. now questions.

everyone Wadewitz first sessions. from question-and-answer time, [Operator Your from this like would of the question to to Instructions] At Tom I UBS. the comes welcome line

Your line is open. now

on And unusual in Yes, and you then great. seeing quarter, ask March. about you guess not it in saying progress. right, Dave. pattern, been I And freight second not you're seasonal it's Adam. pickup how a Thanks, think to very the seeing your Thanks, of I thoughts may wanted terms April.

the contract headwind. sequential down, rates the guess impact seemed on quarter? within for know how And there saw the a with like a free you I don't is of stepping improve XQ contract reads, then to much So catalyst I

you So about that XQ given truck. Is how under contract and just Thank in impact? further just So thoughts some that potentially XQ? OR XQ would think around pressure lower versus truckload rate you.

Okay, thanks, that half of first half. question. Tom. take I'll can Maybe take second Maybe the that Adam

like seasonal we continued given that cool is rise, a appears April. never expect we to not of April, the begin noted excited quite whole season continues year. that's And that a be As about been that that March virtually the begins to other the the have did uptick will to be as falls in as kind we've you in in we that every normal spring. And of early lot mentioned, And quarter. just and little in beverage seasons. it in And temperatures the see where bring first calendar It this true of temperatures that bit up. part a pick through to catalyst seen

indications from are throughout lead season, that wet in the first little the will to the the a produce We wet we season. later quarter hear

of I produce. uplift, that second beverage seeing we could we So the which June think move we on second have of in do probably early as into and is to possibility to deeper see May any still that kind the the too closer quarter, typical but for seasonal see quarter,

Long port. a That imports the the other South being the is in a two. And bit there stayed XX morning. and have said, see key busier factor this with bit. Beach just had start about to I Savannah Things looked watch little out got LA has at to report a ships normalize East to

dock see LA rare versus multiple Beach. very so that a have Long Savannah it's of ships would And that you that like

And West are ocean pickup way to about a that come the indications again. the containers so make their we're are make that that volumes the are way, Coast their over some into the starting to about of and to some there see in

we've West think prolonged has it's deficit And a XX imports been the I this years such since Coast. so on been seen of a,

a And we of fair West. amount so exposure have in obviously the

had we've would the the already. consecutive in so for to that a And difficult imagine we in saw second, imports to that on first. quarter see repeat navigate It's hard we as as a

comment be would look the to on So a positive to sign a -- to want at. offer that Maybe

customers an Sure. they from And inventory what Dave much dovetail standpoint. said off better of feel I our in think, position a from larger to some just anecdotally,

expect inventory the customers than When rates contract ramp so overhang year think got they would orders think bids know, forward some get were to to be that rates, And about through to much the before they try of their I that replenish I last inventory as think time, we spring pulling more on were they work late. would through really concessions as bid. that up was to typically at this we many they our we normally you

I we that to on see that season. the felt think more so in mile. in But a sequentially, would normal we've bid we weigh typically quarter pressure would per on And pressure first a And than more rate expect of lot certainly, margins. would

fill business third fourth small are then in of back improving expecting we to quarter. from the transition year we as sequentially. So and truckload operating to margins And half and the the there some pressures

Great, thank you very much.

Your next question comes of from Jack from Stephens. the Atkins line

Your now open. line is

Okay, afternoon, Dave And good and great. you. Adam. Thank

two guess, question, I could. So part I if

little two to more of but of I you bit get just bit. would unusual call? free able to So a to guess for the sort that Adam to about, you be given the quarter, coming bit to that if or Dave extremely the a curious you by like think more it optimistic, certainly make market of customers potential last you talk get what's is We've off could are out to as years. about and But be think would maybe half, well. be And know, you curious as flush just we inflection fourth I time a I feel in three confidence that. I a the sounds about guess chime stabilization and maybe kind a of kind

relates questions as need implement then, investors profit getting much some from been there I've Xpress U.S. be call strategy. there guys improvement to about how the you as acquisition. the might revenue And to it potential

like you're to targets in be there Dave, looking Swift revenue you So you. for get could profit able about perhaps did to you the calling to to there. that talk terms some need Thank just at of to may happen what

Okay.

Jack. Okay.

you when we we at is, the demand been tells give us have you it still We continues and Appreciate still here. the needs been down, the supply to But supply look have nearing will to the it the gives and us I questions. fact try things would band that at despite we what look answers say equation, confidence has when be some weak that that come still to levels, that worked supply and overcorrect out. more has much start be there us we tells we're where think how through.

So there's if we're few from the supply, what's we industry. factors. it trucks, maintain to with There know look at we a on to enough posture going years inability refresh is three the now rate the key within and produce that trucks with

as not to And seeing viable a viable alternative alternative that a because steal it's so, alone. most noted market, And keep new when life was used you the legitimate, in the the is rate really refresh truck. we're can't

to of volume and it's has the the also a deliver so to led rates support when chain increases price supply not given the challenges trucks steep-steep time will that. And at

So significantly. tendency three And would a the to looking the would that surprised of sure up be that if be meaningful like have we quite cancellations. at going loosened with on typically would world We has not trucks. feels what's first It overcorrect. saw

own how we you look we It it last it year at is look look that quarter, employment. to fourth have when that in would be indications feels approximately the second difficult slipping peak seemed internally to leads, to been early maybe quarter road at the The our over labor we that's the sometime and in hire when but third third parameters There's source to takes experienced labor. and particular like and likely drivers. since what

all not on per definitely seen brokerage spot obviously, carriers, shifting whether economics so we then We is, other And rate discounts, from possible be with it still to labor rate experienced And seeing look fuel then have the to away insurance. environment are many understand services, trucking. And at it your head we we our haul and cost it's provide other we've party third in when or be relationships And we businesses. where the we have profitable of attrition. exceed signs mile. of lanes the that

underway the allow see is that. into definitely third small be to floor comes to terms storm, to the we replace flow and situations, newer buffer? to the funding, has old attrition businesses, here banks that stop small to And the other with be, to words, to there. cash then the access very So able rather not in the to see In carriers, third been and navigate up appetite play do weather negative credit that replenish of equipment, leg equipment abrupt get for is labor what that would well that slightly in what's the a or financing and kind and of tightening the

time. our And it So steeply just a unrelenting with rates, those of quarter arguably into you fifth we negative inflationary three factors on, doesn't, going spot are it's only in previous cycles, matter when have costs. those of things consecutive three

quarter catch have go. been the the and little chains a another to see demand play robust supply trucks is, have going up, there supply flow where it to trailers. able to the don't But fourth to another bit ordinary of combination see be a all two to seem need fewer we're in they met quarter So expect there and and chain time we or eventually we significantly to where will have be in and where quarter, with and drivers a pointing will of we you'll more

look early that would the question the we these of etc, access not I to lot likely deal. would are kind overly not third until way as of wise let be how probably alone we cycle, with where call. related we kinds that wrong There's we have specific we to It's U.S. the at at at revenue my That's of look it won't approach we've that, about to hard this. until Xpress. given just a revenue you on second into customer That a the Now, close way get timing your call businesses. closed this for any rates, well expectation the we going quarter. take are in tell But information, specifically

hair comes that in Now XXXX, different comment was drivers a drug of were a a after possibly scenario. was where not a reduction scenario I'm of testing. the we the decline saw number because different, because sensing September but revenue, subject a primarily in merger, the that had very Knight-Swift That to new that we trucks over road of follicle

disqualified after number off in very January had areas we to comfortable so a in months, similar fall of trucks came contractor independent some that ‘XX, testing, first the that number drivers ultimately of the XX in follicle hair the in ‘XX, we began also closing drug that And deal of weren't which exposure starting we road with. the significant of

long the combination do revenue. was did Swift standards interest risk and profitability we and that more that independent program of reducing than trim of had of a with or the hired, conscious the or best safety made term so decision call in very with and And safety was contractor the drivers to that increasing while in the trying it about reducing what to somehow

those drivers it at able not We was. recruit qualified. wouldn't been But way. qualified that to have pace a And that drivers, fast enough weren't to we replace wish that that's were how

the testing that the same we and issue. not drug and time driver do of exposure over changing kind course, been that and At address Xpress been we've with already have follicle they that had. previously independent the crossed. able They some hair leads sources with U.S. so adopted things that was has and of Of to by bridge contractor hiring deal already have

broken business big And U.S. into what so a Xpress few you at you have largely that a when look up pieces. is is

million] today in if at times, filings, approximate in performing previous a they their got based XXs. dedicated piece were on performing public [XXX I mid very look large that's You've historically, the

be in the upper to decent transportation it's XXs. ratio, then operating You've that's similar road profitable. and an $XXX of it over what largely size, performing a mid And got same million have the business piece then very got in to approximately million that's trucks, almost underperforming a hasn't independent that brokerage total been business, XXX appears XXs. the mid you a was the number And

really and needs kind you all revenue break any Jack that be of to at of not that so we're there call. And is this really down looking

we'll so be through for budgeting But close. I And details those we after that. work wouldn't

add to Jack. just Yes. that,

to issue I freight. Swift look the than conscious David when at U.S. a a any mentioned, effort Xpress And between the turnover. very delta cut side on Knight lift As the U.S. customer the the I more turnover related large Xpress at there's opportunity, was on back and driver mean,

there, to us for a effort. there already good put so they make recruiting very some and resources And progress have some

that drivers protection I Swift us some from think during saw gives losing of merger. the the we some

we think I the that you be won't slip So to. revenue feel alluded of we won't to, see as confident type we able same in

guys. for thoughtful responses, thank Okay, you the

Jack. thanks, Yes,

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

Your line open. is now

color. for the thanks Great,

mid then? view? of view more than ago change that And step a a right EPS changed? kind the us the in what's just helped initial your if else, a of bunch floor the was the and current severe of normalized [indiscernible]. you was earnings the just back Has cyclicality So cycle maybe guidance I you of What has detail in thought with where thought when big everything what $X. told little threes you Adam, the And picture. diversification back kind year been kind you earnings but current Has gave the Obviously, now, a of take bit. know not I of you're the is? on Dave, of

additional Ravi. Yes. can Maybe that on then color. I'll touch And any Dave first, add

expecting $X, up the the show continued were about certainly business and results insurance quarter see we in not into the fourth to in think to began first quarter. the I So that the

not available as and having program that, the equipment equipment that from constraints. a was you the that camera challenging to smaller of that supply in some And the some more when chain those more carriers challenged to pressed would premiums. as we lower of compliance We're impact are of a were probably make to insurance where well, available run have their on know, and other have environment just some were that some probably of miles make a pandemic because heart their to of around you are attributed of some the challenged not been issues the payments for of feeling bit up rates standpoint,

probably that were And trying found some flexible carriers with these be adverse we so we of and some to had selection.

that think So limit change I feeling half mentioned, when I downside out. the made And we're probably the the our of impact try business about to certainly, from we put on guidance. the strategy on we pivot what that's in we what originally

We historic for. to for weren't unexpected, planning about be think then environment certainly at we imports was that the lows. So planned And today. not current

saw of And of didn't from what of be. think the know that change. more I proven was to and that XXXX, demand standpoint. backside dramatic constrained just of that because lot capacity be going labor a a to the historic quite some was When we it's We

tried as about I always changes improving. to think, probably we've it this how declining we've never how well business, quickly forecast forecast Now we look from when as

we current we have more of but to given pushed could some environment bit half year And the out still look But been optimism than change probably hey so back rapidly expect. this out the it's that when we in. a we're

it's both the number, business we and was that and confidence higher that still trough were, that what the of Again, the higher, remarks, his pieces guidance merged. [indiscernible] there Swift later holds had to the earnings, trough peak the hey, the make we previous much a reset in But with the profitability $X will, in mentioned helped the we when get is the All on logistics at earnings. think was a us with felt we where businesses to moving look stability didn't assuming Xpress opening looked higher were we from that will account [Sees] And do some relative in than coming of LTL and cycles. did be up, that there. few Dave we we as But led I out I and growing expect able number to around. number trough we we U.S. for. first and again, then to

the truckload in just business full and to business. to And is that for adjustment. line bit the there Adam produce a of yet an and that to XX% a be I decline add ratio Adam. perspective, logistics the which withstand our are support yet some revenue take know clearly in the decline acrobatic. much in a quarter business, XX% nimble business in move asset for country first decline top based rather XX.X% XX% that was op that Ravi, kind I can helped some that a that I little with market, decline don't said, change which mentioned, our tell robs efficient still feeds work from would you a Well will right, our reasons of mean, that income the quite still logistics operating that It's a imports, I many businesses and did. of in they and income income. just, operating

can't think insurance I adjustment tied I that program. enough And of that to that emphasize that is the XX% original below guidance about

And so to for hate that's, people we would lose that.

than trough an XX% put were still the earnings last you more than call you the guidance, to of cycle. per basis of midpoint still if on to we that share to Now, higher the go at new down the going is were it

importantly, cycle, last to high the the But seen the we're low we go now And make for that and continue cycle that of we we trying so, can. the that have best that few happen to and cyclicality, increase more to from what as surely the the cycles. sure to mitigate we're color trying is

to that make acquisitions in exactly make acquisition able trade But and put work in to free amplify a flow which able And cash great was XXXX sure to April help us we've XXXX, be not our the making top share. beginning a improving with exacerbate environment. for moves of to And with to strategic these bottom of agree announced further to by to would think up Swift been we set key the That cycle, on in ourselves next that us. the to cycle. to from our earnings to per do that you our hopefully, is for performance both the objective the continue well we're and cycle go I that way

you. Thank Understood.

Thanks, Ravi.

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

open. now is line Your

we've talk here. Adam. bit surprisingly Hey, we're and rates Obviously, great, to that afternoon. continue Early a Good bid season Maybe about Dave downward, spot the rolled on have has two into like Thanks. XXs. don't how contempt got the and moved going outlook and season the evening. maybe dollar almost through in roll now as we mid there really comment are thoughts on that historically thirds trough. trends I your a been know of Seems here. kind little

of we've think. looking where little Okay. we three they there. with spot on rate to the of Well, that season hit bottomed Yes, bouncing based that that bid now imagine a get truckload have customers at try like them a would indices. When two we some the that say certain would see to be it maybe it kind think begin but does Ken, they to look thank you. and seems to Hard gone of bit rational between bottom I and hard think I look had on rates somewhere increases of back. floor with would years that far

rates, some of pay or to there of those chain. the clearly or paled supply ocean they've example, of had to an other get for comparison seen rate warehousing to some for effort is increases we've that Now, in back. what But that components

through committed an unload and involves behavior Now, they two pools days there of the trailer trailer they're they so the has increasing a usually also business that contractual cost. to recognize the hours that trailer to value customers a have penalized our unload and been not acknowledgement before take with that

to and spread spot contract were maybe back contract between spot rates kind that nationwide pool from outsized $X.XX. trough, value XXXX that at of rates that, the And if a the between we and and regulation that the support course, with gap ELDs peak is you trailer a about and of the evolving go look the of was to component XXXX get network, changing you so think that with

quarter cycle, looked probably if you was have the And of the until $X.XX. the XXXX then previous recent most which at been XXXX, first there peak spread would

course, Of we've electronic had the first that's since cycle logs.

of bring. value spread, can So you acknowledgement see the that meaning this significant trailers double the

more spot with looks the to peak most rates somewhat spread spread somewhat that exacerbated. about recently, trough now appears similar, but moderating look on $X.XX we like so if to it even Now, be

so those that. see significant and customers. a of the mentioned, through through as that to perhaps think XX% And effort of of network. portion already have It's many try been little an bit situation. a of little a And bids. fluid Adam bids a bit We there's back as flown by get we've We as our

of a And an the as minute rather into what so to that change the visibility out. change in kind and course, And a things play that to up gives see environment. of begin of year bit rates little expect, us we quickly tighten things

Ken. helpful, that's hope So

I hear helpful. appreciate the that's going given to It's interesting and to but it's spot, what think you're speed seeing how historical out, Yes, of the just that back. look pan

Thanks.

of next from Alliger the comes from line Your Jordan Goldman Sachs. question

line Your is open. now

generally holding turn Yes, was up little environment to the wondering talk maybe and for about on your lot I of we've bit bit truckload relatively second a I little maybe in is price but there, things we could color environment. a comparable a expectations? Thanks. if of core also about Obviously, LTL a sort terms assume, hi. industry, LTL talked of demand the for the timing but some

still to truckload what we're see so doing we compared it's this. the world. refreshing Boy, in Yes,

as positive X.X%. so, they've hundredweight think a not has And seen up, quarter seasonally quarter great relative I on it revenue LTL. But shipments. we was per where typically was And still first to LTL for always been is noted, pressure some

a feel is So full already about from good start very what not truckload would alluded the in off indications. to operating -- market. which in have LTL ratio what to we is the today XX.X good I April not

expected the say there. your to probably remain couple would the year-over-year resilience we for answer I quarters year shipments. with difficult But this question, And seeing line would we're got performing next most on here that And for Jordan. some have what encouraged business of we've comps is there. So we in

of MME and would we've the just a fourth combined And on the quarter that a that putting the end you and expect type the worked as of I most by have of AAA through and that that We any probably Jordan of from add kind in first single us. be would with come some challenges platform. we networks did behind on integration we'll quarter,

network we second the MME network quarter end as part pickup of we've a into towards the now with so being of quarter, in And result particularly some seen larger as and group. the volume the of Cooper first the a AAA look nice

you. Thank

Thanks, Jordan.

Your Wetherbee Citi. next question comes from the Chris from line of

open. now line Your is

good afternoon, for guys. on Rob Chris. Hey, It's

you? how Hi, are

guys these little in year? have Could the the provided? gains through or cost sales seeing up with and terms that, are of sight what flow your excluding got good kinds regard you you expectations per mile inflation to Good. are the gain alongside you based color and will on the from gains retail. the give us sales, you're back of in are And just stepping line already the a to this half the your OEMs, selling of sounds of sale bit stores outlook with what more be that It on you've like of Knight that sales guys were on thoughts doing

some would the be certainly feel improve older equipment on or third going parties is new like large of does lion's companies I think equipment. their be other going versus sales used sale, that, fleet, new be of age have which on to option their parties. going to hit only equipment the to to to gain where the third the of to So because access the are our share And of markets it fleet the public than prices the grown to

prices hold because thought better think originally dynamic. we've of that And than we seen so I

trade have pretty we the force a little good network to now, so we these of sales equipment. in because and very dispose a of And

us And so what's gain the improve that's led guidance around on to sale.

it's not on sale, we're I gain still absent easy. now. areas several progress Now, in making think Hey,

we're have that off, prices I back think commodities and concessions pandemic, some of we're a seeing took raw pricing come there now. slow, have quite come of we're, have up power. we who is purchasing to, going but because It's their goods their some bit during off, vendors certain quite the a bit

than we'll get more so And fair discounts. our of share probably

we when do opportunity Xpress, only the hey, us overall a about we deal front close even it's help Xpress, all probably for companies cost on U.S. think to to then not And spend deal the gives U.S. with involved. better more for that just to leverage but get then when

And have freight then are be the up loosened for small labor or carriers. seem to from large carriers to carriers, you the the failing think large the about opportunities a some who does to come has there to flight because don't quality

other training experienced much years we as, getting terms meant do not of as as as or in bonuses so we sign to hires incentives. We're on And so much required did that's out. haven't had several more

if a some making area. in and some half as -- the back market some we expect the cost expect and then per which get we plays getting out, fixed on starts savings year-over-year per volume we miles of tick And year, that overall cover like mile. costs up, basis to lowers So improve your the progress, your tractor to to helps certainly

dramatic progress not but we improvement small as are, where some So sequential we through moves year. from the

X.X% several were on end, the And our down was if down, -- here mile miles time some see been you first And that I the you'd approximately up add X.X%. been just yet look consecutive for in at piece, with about would had the miles so to back have when cost was quarter, those to per that you down miles quarters.

are market where so difficult to more and naturally in loads a pressured. it's And find volumes

operating this, amount us significant are move we as the leverage that help and operating, rather year. can in when but costs improve compare we business, cost. with up year-over-year of the higher that kind can of a do we basis Adam rate the We're we battling didn't on throughout of if what productivity pent mention rest interest

robbing little And share just as bit that's a earnings well. per so

get tremendous cycle, ways sooner later. help the leverage flow that But and maximize toughest keep hopefully than So to business we up cost cash increase, at earnings per through as create digit. the part are effort there of mile a that single pent an this us just in the this low can there's been really it's we can and that

color the guys. Appreciate

thanks. Okay,

Your from Susquehanna. from Bascome the line next question Majors of comes

is line now open. Your

my questions. Thanks for taking

insurance. the back to Going

risk your in non-payment back last you you Going more felt the that of to through in the insurance walk between frequency that severity a us and credit Can what disappointments from quarters couple underwriting versus business. and little detail of And the came some going of over again grow didn't expectations? last permanently, business be experience something just if that a or looking bit a can you're the damp, little that the at meet deemphasize couple you. given to that's quarters? is further, Thank

rapidly to new Yes, questions. those grown of but because necessarily by for have recognize are fully and to intended some have to good over the just able do risk certain as challenges that has supply some to time technology things We carriers had that mitigate a been technology us. challenged the little these we bit this efforts access business rather have of for of do, chain ability to weren't carriers always that The a components.

claims, these kind a it of on development the of in tail, time. the bit takes that say would I

And so it you know don't play how to necessarily going scratch growing exactly always quite something out, you're you play that's rapidly, from these and know rather starting when out. how don't

would way, two And the have quarters so relative for expected we last claims’ played what from in it's to an out perspective. unfavorable a

and are couple been going they're if had environment haul lose couple further and insurance to is, you difficult we their a a claims then to couple and a two was That the the their which obviously now it on, where insurance the to means with factor the factor so out. I claims in unable lose quarter was carriers a up difficult fourth the they the to that environment that a first their surplus, until they be that accelerated that recognize the going would point more on very these And reserves on where of that quarter. likelihood based frequency would to to they're majority supply to you is you not bigger than last we've means pay claims the experienced. conviction which loads, that and of But building the of severity us quite due have But between felt of for expense premiums, continued in supply quarters to it are how attrition. say finally which operating recent that play coverage, gives months, ability

quarter. release, And so talking the in as you're in about this noted we $X.XX

mitigate so we've that. to And taken hence, some actions

We somewhere Now, miles as here well. in a That good that we for understand us. We for of And a from understand lot business do program the return are the day. operate in where X go safety. there's million risk. neighborhood performing we a is

we is business very do think viable a a business. there growth so here viable And that very opportunity this and in

supply to There perhaps a risk. up just prolific us and take And to to allows times you as back there are back them this want we to the we with are just a to way it had, growth little see the that want of function where where This away in terms want to long times can time is away. catch you ability do catch to bit also where intend chains and our for that but that allow a in systems up we've opportunity. things growth term manage do we so

of slowing view as this growth we and pause temporary. this this, So

and we So. We'll it But looks JP. joining your you appreciate to Bascome are call. question conclude. appreciate we you our we of out time, back like Everybody, with to it that turn

participation. for Thank conference you you. your concludes today's call. This Thank

disconnect. now may You