Knight-Swift Transportation (KNX) 20 Jul 232023 Q2 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 Second Quarter 2023 Earnings Call. All lines have been placed on mute to prevent any background noise. [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 Thank year on for plan current and the XXXX related you market conditions our everyone, our you, to provide second full update topics we guidance. JP. joining Today, quarter thank call. of update afternoon, XXXX an results the and discuss quarter, earnings

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

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

get to these questions Following to our topics questions we're possible to we'll to participant. the many commentary, in as going answer related per limit as participants order to one

have question, get you feel back free If to a second queue. to the please

you as not questions to due get may will time allows. restrictions, question many call able answer (XXX)-XXX-XXXX. to If we're your We time as to

disclosure statements I'll call refer company by two the to slide to and predict. forward-looking the conference that following. risks, are the and This So contain made you of may on uncertainties presentation that note assumptions difficult the to involve presentation first and begin,

discussion may the directed future may the the of the results. Risk XA or Factors on are in for Item differ. that company's Actual information X Investors annual SEC a States XX-K risks filed Part report United affect Form with the company's contained results of operating to

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

a year particularly work, we and downcycle at difficult into a Adam, appreciate an Thanks, freight environment. over unusual today. you operating us a of now with joining create to dynamics combination We're

with recession. indicator economic long, on automatic interest consumers softness inflation. so in and economy we've without rate digested freight read-through the truckload an encouraged increases fast so demand how the positive for we're weakness, this I'm or that fall suggesting seen their far, know don't predictive very fact, impact broader ever not I an have in of accompanying economic is and demand

The and unusual in behind from XXXX of built worst those goods inventories flow impacted us supply to enormous market part of chains. that by was normalization XXXX. the But expect the in severely the appear the into further the growth adjustments truckload of reduction, we later in and and and be

capacity, met is the freight normalization now less being not truckload with with carriers environment. harsh survived have as truckload This

of demand with of reprieve that is has reasons One the truckload cost in would the freight created. destocking that inventory be a lack this normally decline such associated catch-up

volumes any drivers equipment a Ordinarily very a broader matched other with than recession prices, and economic those freight more lower plentiful costs, time. would the market, labor low fuel have soft significantly loose

those up this for margin None an can have difficult concessions come present from challenges of cost been time, for are prolonged precision. with predict to failures These catalyst Such recovery. setting recoveries be often strong to pressure, an unlikely eventual leading and others. business

environment the We positioned current to Xpress. are includes US in conditions as and thrive, improve. newly-acquired This grind our

have unique new to as we done in have for opportunities US doing what of Swift, levels with we significant our the LTL Additionally, and build-out achieving profitability. network of Xpress Knight-Swift, such

their continued in and the diversification growth segment with seeing our of are performance. We LTL benefits

Now three. earnings quarter our three turn on I'll results second compares year-over-year to Slide consolidated slide basis. revenue a and

share for and our income declined $X.XX. diluted share operating earnings per quarter came while per Revenue adjusted $X.XX at XX.X%, the XX.X%. were GAAP fuel declined by in XXXX earnings by excluding our of share adjusted surcharge, per second

ongoing to in diluted we claims quarter, the this $XX.X share as business negatively $X.XX expense by of during or impacted or $X.XX a realign within per the our million development segments, in a performance result business. per a increase share $XX were million worked non-reportable as insurance third-party operating loss interest primarily results and These the diluted of

the that in loss the the $XX the we from operating loss to million The for further reduced loss of second million $XX.X the year. quarter moderate half was will operating anticipate first approximately and

adjusted of below each revenue slide largely slide the illustrates and income operating depressed demand lacked second This for was spot The the for Logistics expectations quarter on the Truckload, of patterns four. has and demand the on fourth our in Now to and typical pressure pricing consecutive support caused Intermodal in intensify segments. seasonal the Freight segments. quarter. weak to and contractual market

in This Intermodal caused and acute pressure Truckload our on segments. margins

Our revenue well, mid-XXs. produce XX.X% ratio. significant environment year-over-year, operating to the Logistics weathered in and declines in the a adjusted per LTL soft operating navigated segment, load, volume

on turn Adam truckload now it each five. to discuss I'll slide performance starting with to operating segment's

truckload XX.X%, reflecting our record-setting second year-over-year XX.X%, XXXX. a an income the Dave. comparison especially of declined while surcharge, basis, against quarter our second Thanks, XXXX, operating a -- of of the earnings revenue excluding quarter record-setting fuel by On quarter declined difficult

The quarter pressure second was per through on to have pricing rates begun the rates contractual more first-quarter, prior rate overall The of rising the year as demand than softer-than-expected still quarter the in peak spot overcame put mile, contract expected. rapidly. fall

hold control cost helped X.X% quarter, the still Our though cost year-over-year. mile flat up per were with costs first efforts

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

miles due coupled Overall quarter the environment, April, quarter tightness weak in lowest second utilization persistent to the labor a the in before general largely with level the and ever, demand modestly bottomed balance second the economy. building marks of quarter. for the in utilization throughout absolute This

is and the a truck, meaningful The current per mile low opportunity, difficult, headwinds once revenue leverage represent which but operating levels cost that one utilization on makes demand the per particularly environment of recover.

six. move we'll Now to slide

revenue weight environment. growing Modestly remains to operating surcharge as solid increased surcharge fuel an despite per adjusted volume continues segment and excluding Price LTL fuel Our XXX the year-over-year. ratio, well. here delivered XX.X% softer revenue, X% excluding perform

moving year-over-year a forward. support June, capacity which experienced Shipments per recent requests continuing but a shippers inbound for increase Further, July. X.X% appears build we into were day down May in and to sequential show from in additional be did have

acquisition will more the since to shows the The allow This priority to super-regional support a and short-term us the find as enable out in freight terminal key locations future. the in MME Filling planned locations in well long-term, as and Cooper map near and a new in national AAA creating XXXX to existing remains indicates network for the opportunities capacity. us. further LTL in a participate with our and strategic us customers truckload locations network

driven market, near decrease Now load in was of achieved operating Despite environment by slide This longer nimble maintained of marked while XX%. adjusted the decrease soft margins and seven. XX.X%. the and by in that revenue a offset being corresponding an current posed load costs. down purchased on in by to challenges a ratio by was top-line remained XX.X% and per XX.X% logistics price with disciplined no transportation the business double-digit is declines is Overall, pressure count revenue our

our has stable behavior strong These while quarter-over preference once quarter, be past declined years. we outsized exhibited brokerage for few will sequentially. over the volumes an Customer the service recovers. Further, expect were demand a volumes only power value traditional beneficiary, proposition, this

right, we the in trailer time, network. at our show the throughout coverage of chain the supply actual snapshot an to extensive On have locations illustrate we a point

segments our distinctive XX,XXX provides us scale with nearly of Xpress Logistics to needs. the ability with of customers' Truckload US and network respond the in to further trailers both our addition growing This

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

partially by On decrease slide eight, I offset in decreased per revenue segment. will by a a Revenue load, in Intermodal count. increase XX.X% our cover load XX.X%, driven X%

revenue operating project, the wind-down Additionally, margin and of pressured quarter. container our the in further leasing

Intermodal spot times position industry in the the rates and quicker leveraging transit due soft and are better current truckload the service low the of Customers truckload volumes alternative. freight the are down the to market. environment competitive

to positive Further, in volume the improvements we awards, bid rail growth a the underlying activity, year. support However, we experience through the rail service of half and costs return in and are seeing will in volume profitability. second improvements should

services, Now leasing nine nine. as our and slide illustrates which warehousing rentals maintenance insurance, equipment Trucks as well and slide equipment and non-reportable The under sales segment, activities. onto Iron includes

actions third-party For within the X.X% slowed revenue of as year-over-year, challenges growth address program. recent our a our to result quarter, insurance to largely the

our improve first quarter by the a operating million to $XX loss the million loss its operating since line-of-business during to $X.X Insurance efforts Our reduced second Iron quarter.

and We as risk applying have risks made stringent carrier criteria exposure underwriting we retained progress renewal. higher and of basis are third-party up reducing the for any more for policies premiums come

takes through it is due and time loss premiums the higher ongoing operating to the current The work claims to development primarily portfolio.

intangibles of Swift loss their XXXX other remain the non-reportable acquisitions. to category million an within the merger to businesses largely which related partially of Insurance the Knight bringing income million, the and The business, segment, whole and operating stable of within non-reportable between loss amortization $X.X includes as a Iron and other the $XX offset

the the segments modestly We positive anticipate for second non-reportable operating half for income year. of the

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

historical investments freight pre-pandemic Now onto diversifying making this Despite continue compared still and position capital slide returns, with to in during in levels. cash to compare flows businesses, growth. recession. environment, are technology for from They deploying current it intentional incoming down we and context well business our XX, further the while strategic a to an approach challenging improve

vertical LTL to earnings sector entry XXXX synergies and customers unlock enjoys visibility also technology greater into empower to this and greater that than truckload businesses. in drivers carriers and value Recent new and examples friction for third-party tap the expansion are industry. remove a enhanced in our investments between growth inorganic of Organic and power, our unlock organic to the stability further

flows $X income As month, have improve acquisition Xpress demonstrated a revenues this and bring to room earlier business with of competence. US well billion our significant as we cash operating to where in

US Dave on more XX. turn Xpress, it context for for over our For plans slide I'll to

well months, past at closed to the plans transaction month excited We're Adam. our teams underway have the to have results synergy beginning engaged improve fully and work Xpress. the US this execute the Thanks, of formed to of few with over to as

We've moves to to gate, US realize intermediaries freight facilitate often Xpress. lane an cross-brand to deal improving cost ground density, that directly selection, already profitability but already for of savings strategy, begun only more in require in still and opportunities which market We're monthly The of to remove mix making cover. customer with price, collaboration, out-of-the all $X progress. million not shippers with network not revenue pure prevent and are

preparing changing tools focus and market approach similar business our to a training Additionally, our react is brands. and the Swift other profitably some of Xpress time. the and is to truckload over-the-road US at Knight we not performed that Most for to with are business our

the in and The segment for is Jackson, need less. dedicated improvement Total Mississippi at Transportation

to However, see we expect too. there meaningful progress

of half first achieve We expect to before interest breakeven expense the Xpress results XXXX. US operating in

XXXX cost on earnings We for target realization $X realized accretion XX% per over anticipate in are side, in XXXX, increasingly shifting the much barring on, milestone towards market we positive the the as still the the of share in of market per but time as cost improvement improves. earnings opportunities synergies the will Early per to accretion be of the reached We and of recovery, revenue truck, a XX% communicated. the previously estimate balance synergy that the mile. revenue

more the of have that underway a accretion the the to represents large we to achieve types opportunity earnings Xpress are Given We that efforts and scale feel detail time. communicated. it little over US the appropriate for goals it provide on

transformation and to synergy it to some turn detail Adam I'll efforts. the provide on

thanks Yeah, Dave.

across teams from So, announced working US Knight business that and we we Xpress have synergy been the together XX Swift with in since March. closely established the and both members transaction

all our So I'll improving but per areas, examples. few a these all on the And focused cost several mile revenue with different of we already are underway, our have and/or reducing per goal initiatives tractor. give teams

will execute We terminal at and we network existing OTR, businesses over-the-road the Swift. that with Xpress building the are properties the both US Knight now how mirror

density to improve better and So P&L. two regional drivers, accountability turnover, is US in financial US detailed develop a have safety, opportunities and a develop Xpress. This relationships market, have and already team come. established for the to finally enhance been local terminals will we Xpress to have freight significant recruit change This with the more allow

example our strategy cohesive But resources to tools the would and to second navigate team is And a in allow the available are pricing developing environment. be teams and account more excited changes management fully our and building in market the leveraging them that on-board.

reliance margins. of meaningfully limiting exist improving day We're exposure focused outsized on more reducing and upgrading selection, truck, freight spot securing our commitments, on significantly our with all and revenue the brokers, increasing per that per intents

to want share process, We initiatives couple many but a have on in call. more we the

about We on lot couldn't be excited and will the with in progress near we the make working the see we in that but have confidence of these and we long-term. have to a as more Transportation, well as initiatives, we have Xpress meaningful progress team US Total term

to I'm to touch the it XX. turn back going Dave slide on market to on outlook

Okay.

contains updated XX on we're conditions outlook the remainder slide our inventory destocking. of of XXXX. the stage in believe We So for market final

market calling such out months, for inflection ruling in turning next we're a not few point. not we're While a the

base opportunities case a arrangements already project and our modest in quarter, or some modest including of such, signs. a not fourth showing movement but project As for moderate a seasonality uplift, activity seasonal seasonal seasonal the some is on a return a uplift early typical strong uplift with one,

the quarter, rates has the along quarter seasonal rate in than seem stabilized. slow expected activity in second the contract bottom Having experienced down spot on and have declines we year. in of we may pressure show previously will bounce or uplift deeper fourth modest in expected, second bottoming quarter bid this mile before anticipate quieted After as modest volumes improvement showing to per third revenue quarter the the

especially combined and also higher and maintenance inflation a carriers, rates The standards equipment, with and are smaller rate taking tight insurance will and pressure the carriers, soft lower credit environment well-capitalized keep interest and expectations, toll. less ongoing on

throughout to immediate the and LTL serve second entering We recovery. accelerate year-over-year. into quarter. be pricing continue anticipate should for factors a third to especially, positive and ongoing These expansion limit to and volumes quarter remain on capacity upon trend seems the to attrition, easing the shipment Pressure this capacity the

improve. improving volumes more work as should levels. hiring should inventory import economy Inflationary alternatives to to conditions plentiful Demand levels will and return general shippers though ease pressures the in and until begin stabilize, pressure utilization normal freight

near and recovery improving supply lead market future. conditions demand, freight the of should Combination to reduction in

stable. the remains as spending consumer long So largely

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

our be Hey, our thanks, remarks. prepared This Dave. for will last slide,

For year which $X.XX, we the acquisition-related roughly the loss $X.XX to be expect includes for projected to range a share, interest per now XXXX, $X.XX and expense. $X.XX in including $X.XX per full EPS share adjusted Xpress legacy of US of to

of This $X.XX guidance Xpress. per updated is from guidance US is which change. recognize our to We significant $X.XX include not previous this did share, a

to of the walk-through some going key So we're drivers.

in pricing in cost truckload weakness our pressure persistent the earlier, noted as First, demand on to intensify segment.

to now anticipate mile as As on will decline for compared a revenue of low-double-digits previous result, single the to the year we year. per high-single-digits high expectation that our being down

should we have year-over-year. QX of in QX, flat to combined patterns return non-contract projects but some We recovery QX We a pace anticipate expect narrowing prove decline the than being worst. previously base longer lower year-over-year the be recovering to support projected still slower no provide expect XX% with now the certain are a raise season deficit peak and in in But discussions of around off some opportunities already to with begun. as

to A has from so quarter to carriers to million a in per to forward. reduced per struggle market, US fall quarter $XX our moving Knight-Swift second $XX XX range of of million gains small million inclusive projection on this sale Xpress soft million a XX for continue

late general we last this is truckload reductions, tightness while year, largely economy previously to and difficult more preventing our the anticipated recessions. segment, that benefit had per flat in freight on labor in further us Also, from from we availability cost proving mile occurs labor held since make cost have progress than typical seeing the the in is

revenue the per a governor as resulting in pressure per load And a projected. as mile. in seeing in hiring we greater than and business, truckload cost utilization on are originally Intermodal third, This on on serves headwind

volumes. we to modestly as continue Even grow

project As a year, this breakeven for expectation a mid-XXs business OR. result, compared we the for to our previous now as to

of this impact the estimate business, $X.XX legacy the for And year, fourth, our $X.XX. share and we inclusive expense acquisition-related the back half approximately Xpress guidance of loss of includes for to US per the now $X.XX interest a of of

and assumptions follows. other as little saw change Our are

subject segment seasonality. in relatively QX. typical volume sequentially per in is with margin under a improving improvement load to remains profile, and QX stable LTL Logistics in to sequential before slight Our expected pressure see revenue revenue

the We the for low still XXs expect to in year. are know

For for to second modest our year in-line for we with what and operating the half non-reportable segments, expect be of last our the income growth of second half was year the year the year. the

year-over-year Excluding US Xpress should in truckload modestly count QX. tractor tractor slightly miles positive per down be with

second Fed half the is of nearly $XX assuming Interest million first and complete. half roughly the in the expense cycle the primarily increase year, hiking over acquisition-related should

now million the projections $XXX to to expected Our our our to we as expected of US $XXX million, and CapEx XX%. to is tax-rate be be is Xpress half added back XX% to

remarks. our That concludes prepared

So, JP, open we now line for questions. will the

Instructions] welcome line time, from At comes Stephens. like I the to question-and-answer of everyone Your session. Atkins question the this to would first [Operator from Jack

Your line is now open.

Okay. taking and Great. and afternoon it. my for Adam. Good Appreciate questions, thanks Dave

for So start, if to now. right but of a we I'd touch like today, know lot market there on the in LTL I a out LTL I not have could people maybe the question probably there's going it's changes biggest minute. guess on but

network could longer-term, an mean, You bit in to that next seeing network touched and shut against organically. around thought in have and expand strike closure you sort building could unfold acquisitions does planning a are at I Yellow week. challenges that. then LTL you maybe I the Yellow in rest or versus down, operational out protecting here if the were how of guess a see change early your any I wonder How of on the on the on day we we that do activity you if recent comments. here, a think maybe uptick assuming things

it. I'd for that touch So if appreciate you could really maybe minute, a on

some reasonable uncertainty of the that. it's recent gains LTL us not volume noted you've I more probably try probably whole our be we've Okay, speculate, seen network, to than that guess a that assume thanks, that to and to the Jack might in lot some connected very for appropriate of

factor that's clearly right a But, now. at play

-- we in how and so. organically of and be that that business understood making the existing say the fill totally is it's and have going out the some will consistently, You I for least LTL hopefully to LTL that involve steady, out view with cities play-out. growing acquisitions totally are way is the service doing vision network one building would our overlap to that so already to key our with existing. along country degree Have are it's

I to would and opportunity along We would would I would be pick-up say properties way. great that we the say interest in that any opportunistic there. have that

As had and that to an been, We bankruptcy pick-up lines. prior, They Freight we facilities. some have liquidation. their Central valuable was with opportunity

not by it are, network I the up, larger others that be LTL a might up there underway are a or a larger that will for, than their some further mean we pick-up there are If think in swallowed be quite center near network were is somebody may trade-up. if some as of facilities, there some ones in some open hopefully those mid-size smaller we're offload is little to were that that but down nationwide there here future that to ready they who facilities. are their that

and style, kind So long will, we've in that think be to we're that, Yellow, including types all labor so, truckload in still this world. the there committed of game. I a style, disruption a very approached network LTL result business of stay be we'll were and the to for We're if if transportation, you our felt we established as we're that. to could of watch And the we've for that in committed Clearly, closely. the the

space in of degree increased is, is own Is that, is absorb LTL space to to I absorb to would even volume, our There there network. say, there the double-digits.

we they're the stand especially ready uncertainty and so to along if help some our And way. with serve customers dealing

at Cooper through a of able to, I solutions so, uncertainty. are and being incredibly MME capable group AAA a time think, And LTL provide our and of lot

positioned so. so And ready and they're to do

opportunities that even only come I other And also AAA we're our LTL from Truckload mean providers. Cooper in Jack, businesses, would way add our seeing I not more but

maybe And that's so pull volumes I space some that capacity some are think handle others could the surge LTL opportunity that seeing. an to Truckload into

the into to for With right half account year. that, not clear. that now We're estimates Jack, want just be the our in taking back of

catalyst, that bigger to And out much that into not right could is so account now. a become taken play but

you thank time. much Okay, very for the

Thanks Jack.

next comes Your Scott line of from Research. question the Group Wolfe from

open. now is line Your

Hey, thanks. Afternoon guys.

Sorry ability live we little getting I'm think we're voice. of through you of terms takes are at and least to first what with got half next ahead that grow Obviously, of Maybe year. in earnings do the the myself, year. puts but now, the to that next about my a the seeing pricing

puts what takes are the as to So year? it this I you from base grow don't know and this reduced see

our soon, you and X,XXX X,XXX. that you hope at mile, it, if Truckload Well off I better at were degradation look rate look the the kind Scott, first business, total call off. basis feel we've points, The to we in it's per seen if -- of OR

So on like in to what's tied feeling as we're certainly going bottom. that and rates largely

bottom we would we're we hope -- this So we've the expect of seen and cycle. that sure

the start up, then XXXX, of it and XXXX you at week and the at the In Obviously, building, turns. it it If building see really of sneaks second points so transition we of September. in came things look just of that XXXX previous cycle. came kind June

make cycle, capacity our to in available quickly, And capacity. ability a almost have strong been able each has very successive create with market we been

they've you And the so look as record alluded truck to any low as probably that in to miles are second fact of. we per our we quarter -- that been were have if at

more definitely your to capacity weighs leverage a run operating miles. means pent-up which we but of cost have -- it per it lot on mile, And also so we're and

change maximize do a strong up, only go to really our the but not to it begin productivity can of business, fast. in rates ability So market, the

we're take numbers. look We're of as meaningful may some it out, we half So year. again, at forecasting bid from but forecasting the to our not in see it not not But not a that. ruling if will, the come reiterate, you cycle, traditional back it to that we're lift

look Xpress, I necessarily but wouldn't itself we with say, what disagree for to a think be time time be that is more to and you So what at is if of to ready position even matter exactly might degree truckload a that have exposure. US like we inevitable. now that, is. business gosh, just tough to recovery to It's what and how a help then potent the time

have think I So expanded that Xpress. recoup you being But said, down. we I think, we base several it earnings as billion -- but could very up margin fast surprise much back fast made be we could US as $X may exit probably with doesn't extra next came year the how it hundred go revenue with from now a up how -- that could having it in points fast this basis

Yes, of Scott, I work. think cycles when how we think trucking the

then spot opportunities and First, leads rates. to lift that improvements And load are a contractual will lead that count. premium, you then in that in see to

the some temporary we're projects. already a someone who believe of need being know see we're that and have short -- I nimble. the when to could pinch get first our are spot anyone have And reason The one in calls is when customers available type be else, we we we to a becomes think unlike we premium. scale at and that very of the

this network us would predicting in the that there's give So recovery again, nothing confidence strong green few a year. but across a shoots,

these to cases, opportunities starting opportunities. even in some percolate then of some others, seeing already and other are that that we're many are our those of see brands we're But seeing,

than then Dave self-help Xpress with So when market of turn, can that that the top when we just it. will on US know and does to we turn. probably earnings And mentioned, have react does it think as I layer story anyone faster it the additional

That the week the makes you there just given -- starting I about follow-up get a there -- the can I given was changed are hopped right or talk things or now? really Is Is on question one, second market in two. on -- sure pricing late. Any wasn't a one If last in anyone I all so? is sense. And LTL. rapidly Okay. if how GRI? changing, to changes

I too just now. play but we I premature comment. opinions, views but think early. for premature for to out a mean We to comment yes, need here. still But would us public would things it's a and have right -- probably I too have opinions, little

Thank you enough. guys. Fair

Thanks.

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

Your line is now open.

thank done good you, destocking? Dave, the Are bit kind on Hi, everyone. you're still elaborate of a on customers afternoon, what you of cycle, your they are now can from kind more hearing right little they and to destocking, but does are hesitant that thinking turn consumer up restock? Kind decide cycle if to think they recession? quickly is do the holding Are you of restocking? of not the going how people

space. used to to lengths unprecedented Ravi, to store Yes. product. Well, great were trailers in they way stories I store warehousing our think product our Certainly, heard about find customers, we've went an

first-hand seen away. that we go we've so so inventory seen deplete. that have And seen -- things -- seen we've We've

customers own decreases the the And to come of that on through maximize a in businesses, businesses for largest own we've the get. could just even rates. their representing interest to their sort our Now that where bid of world negotiating season course, they try are

in be tell you based as on strong have I too that come would might we fared word, have a bid demand the we of would but -- this but if cases, what we somewhat cycle, didn't many levels. customer expected business in to incumbent and us the get jeopardy in get and targets our that were, than target to better through we put expected those rates we to decreases given

get incumbent yet the not And declines, to awarded we more have. aggressive we those we cases, that where certainly in and you business. cases did that were business in were did tell we awarded some in will cases, than our I we were not the they rates most business lower even levels,

it's a don't the belly so defense been story we watch But old Ravi, meaning to little perhaps what outlook. always basketball there fake. expect not head the admittedly, -- exact there. is example, so belly get fall if bit of telling what's And as bid, difficult capacity exact new the the If the button, happens the for the product out is it's what us result a we the button, end watch and

severe facing not share competition trucking fellow companies We're gobble from or trying anything. to up

shippers ever all-out what there aggressiveness out I think the season. on have broker possibly experienced some to perhaps rate unrealistic hold most they volume bid as group those decreases That it's is I some think for full through shops. what of get. non-asset could has customers an our irrational been And led of of in we and we've seen a to of expectations Truckload to attempt some to the kind

our And it, comes it go up. to so down costs continue when to

Our was cost still up per mile X.X%.

glad that to for number few extremely is only has been we're -- inflationary that the X.X%, years. last it's Now down number but

we so we've digest kind a done. trailer and position those to still kind in of provide that decreases the not are of pool capacity And nationwide

extracted like to of feels particularly of that it right the as has as out degree we're sensitive at seems point much the least now market where the be So can extracted blood seasonality. and up turn been

than expect not would still to say the normalized. imports The them volumes have one be. I would that freight Now still are weaker

are room go some is So there here. still But sensitive. to things

never going that not past, turn, in don't to ever I'm predict right So to I this is and we're phase. will. exactly -- it the going when it's -- expect try It's gotten in

now have of all amount happens, without of but immediately of alluded across fast and it that network. we I seen size nearly nearly fast, kind we've maybe collect we -- And will tell what as is data it it anybody, do to, immediately you, and as as know, scope now see we we it and fast. that we see our And Adam as the without have the but

so -- have exactly it's to to going happen, to most taken when it's steps prepare matters And us necessary but it what isn't for you happen. the to

And could be an through we representing so that as to US an personally just of to would as an that acting XPL a, look comes X% you but as example acquisition, back were network, intermediary. be, say would little approximately bit at business our the time intermediary prior if it, isn't call Whereas the it's I Xpress, high that number that's if Knight-Swift higher. is XX%. our via go significantly a that carrier, in number

And so with the versus customers to a not directly dealing the the as deal it's that able in going you're lanes. through for difference it's or essence, same as yourself cycles in many believe not customer unlikely to rate to service positioning same mile if that $X.XX in $X.XX with be much unrealistic and directly cases, intermediaries could in per see to to provide, the be

provide to value how able you've and about service our set all position provide it's your be and business so And our to you've up customers. to to to how

is And where is to our so focus prepared. be now that's right

So whenever it comes.

in And investing by, obviously to guidance every going going let come. given. and it, day to that we've goes be public they the that we're to day that when closer you let we're prepared turn we're going this and think but we'll a to is decide We're

two you quarters. have assumes in just so the see next guidance that And not to we're here that going

look my your borrow report, Dave. I'll color, over the at but turn I may belly from button the here. quote for it Thanks

you. Thank

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

open. is Your line now

Deutsche for at calling Mohr is Ben in Mehrotra Bank. Amit This

take stabilize Just wanted to OR ask these to your what's we move XQ? your from yields Do and we in on Or do down? as we from XQ outlook another segment leg levels? Truckload

on we're don't get I the that here. Yes. on that the guidance to call know going granular

and easier of color rate. trough, to improve think improvement on the gave -- it that more bottom XX% I being that in an a starts is kind be so year-over-year than basis, of think rate, comparison think year-over-year kind the of making rather would of would we the down I because be

I lift been to out in f doesn't that implemented. to but little into iXQ to a business model an be a we I need what that the gets largely a we relatively would put, sequentially, probably Rate stable, try we bids maybe the bit you can run a modest to. see that's on guidance there there few think OR alluded And season complete, still has Truckload the we've being back and the very your be of with change seasonality of may think you kind it time bid to expect.

XQ, another you It company one I close before yes. in. to Thanks. Sorry, recent all XQ? squeeze more sure at and I end then maybe the XQ not guys for yellow felt of just And expect were mentioned that if you LTL outcome can change the like year? Do acquire the developments XQ,

the speak which XXXX. to get don't were commitment I as we of took into shape, into intentionally, least -- not We even committed LTL 'XX. the to to at Maybe we the maybe early into We really -- move since timing space, think, of timing any late future kind probably space the of don't to speak any as potential our acquisition.

able ever we're finally, the in of committed been do so We've middle 'XX. then And to since.

we continue and so dialogue have And opportunities. evaluate to potential

is there the As huge. you know, not pool

to patient. we And been ask we've it building We'd but has over to everybody time. committed patient, are be so

Okay. for the insights. Thanks

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

Your line is now open.

half is is into you the Xpress dilution how in Can evolution described of slides? and growth you more Michael to Dave DiMattia the on Adam. for path versus of XXXX? US much 'XX Hey, the that then macro of This provide for back Tom. the the details opportunities in And

Yes.

can So as business million of build improve monthly we've already Xpress the savings as dig XX as slides, expect the the we identified number had in into we We've And days that to opportunities. business. of the X we've US think, I described areas for, now. many cost just on we that having owned identified

from what's be going lot and a to opportunity will that. out figure to how still savings much room there's come of So an

the regardless So those market. of will I think be done

the half in to we the the first we expect of talked think results we business breakeven expect be that So of presentation to in about and the 'XX. sequentially improve I

that the capturing would But be quickly what Knight sooner react how overall to synergy our to we'd able to Certainly, that similar and be that's occur Swift projected. subject does to trucking lead the the on to could kind perspective wind market than to from if we But some have revenue at with of we've back again, synergies a happens what market. we very business. opportunity if prepared

is Great. to of business? you think cadence about XX a there mid-XXs way what's at could Thank months, OR, this you. about? OR the be the right to think Or if And a evolution just look

Yes.

days where brings we're is to happens. think, be point, Adam's XXXX. we're XX for right -- forward that the not to the into our that we faster. change market lot ownership share But to targeting $X are now, we trying I Michael, predict strong are economist when we a per again, And ability to don't have

Obviously, half that we'll recovery more degree the now right period, we're to of strength but first and we switch confidence some we've in alluded prepared any cycle on and than between have XXXX what of a not XXXX the already through see commentary that see the high now. give to margins

helpful. you. That's Thank

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

open. now is line Your

we've the standalone? too many names versus talking rid cost maybe US names. kept sure Dave, that that the Is things I too find Hey, know, that that downturn your consolidating of just you Do conceptually your saw Not the to trough is operations Is I outlook -- higher afternoon. prior to to need not we thinking do half need with guess and about? prior Good terms now now the at that and below have Intermodal brand get your seemingly of to sprawling prior conservative here overly cyclical Adam. and moved gotten the Xpress Barr-Nunn But you intermodal being your something you're target issue? was you brand prior. now machine versus there if floor low. being don't below it in about night

none with above, the answer Ken. Loud of

the So really, that 'XX. it materially kind There rolled trough, early of out say, $X that. since was things was changed, I'd have first we a when few

off in control. out the Others first and of experience didn't half just probably type would that maybe coming had the downturn our 'XX the Some we anticipate of 'XX. of strength we

interest $X.XX beyond rarely probably we've rates instance, recession, about that a given impact were our what in of align you as about have negative rates rapidly rising rates, which when the rising as expectations are a rising does that original with For had think freight seen. just

to a headwind original been that's projections. So those

experience In in business bullish year, we rolled had the saw first that claims our we that developed quarter early what on. And beyond We business We seen. out. very Iron had well were results. last fourth great starting of on we Insurance historically

this a that We more anticipated. in headwind so that money would we And year, had much business. we that's we make baked been in than actually

that year, a And for going $X.XX we're that's so probably to delta the full money between lose now projections. original

seen rate $X.XX difference been what those have in think per we ever you're what have felt, we were. at that there, And double-digit we rate considering I in an the from stable. original right then which through declines pressure our dedicated, So rates expectations even mile, think we've very don't

we've proven would we really was out downsides in navigated than when put so And be has and previous how to floor, cycles, anticipated. more it this comparing the $X we have these one dramatic

meaningful And say. our type will those EPS so improves. think the confident led But margins decline, that return make would of quickly I market that that we'll sharp when improvements the business. we very think all given We're see. look, I to And with here's -- what US that Xpress factors we the

chip further when we side. and make some the revenue wind then side We'll on have back. started cost we'll on away improvement even We've to continue already there our the at

operates you'd scale, accountability, understand combine lose I people we of lot lose business way. It that market lose doesn't to think these you'd don't a efficiency. would work how really brands, probably

to On our we these opportunities resources. help paper, them that can where it we out have accountability navigate the give and the have we have just that -- executing to we're job prove great and have the is brands have we're to and sounds understand more a ensure leaders and accomplish that trying what to we there be make But lot nimble, market, easier. they

given the we So change we that strategy not have market today. would our

Appreciate for Thanks answers, the Adam. Great. it.

Thanks, Ken.

question from the of Jason TD line comes next from Your Cowen. Seidl

now Your line open. is

bigger to legacy think and Swift going we little The of increase. then Listen, a how volumes Hey, much in rates XXXX Truckload night Was than about should are as wanted we business? look sort Intermodal that And the expected into to expected in Intermodal forward guys the performance and as we the difference sector. I focus sort very loss much. between there on thank you, bit quarter. of

impact an of very was against. Intermodal to small very model. much compare a and have really don't we That legacy Well, different

of some we've And progress last the but so was some operating some business, leasing proved couple done we that ratio see back nice really profitable. of Swift made very the be I at look with the Intermodal I that on to on years, containers

confident would our some you were have rail we the providers making customers that rebuild, And in changes we felt knew when we that eventually up. of doing that have with that back and have but that, network fallout very from build providers. to in you we And terms volume some

has So most containers and of ended, received when those project lease we've back. that

than depreciation. up still our have revenue, it lose more And a that You pick margins weighed bit anticipated. you that we you on -- that

bit of then a challenge because follows has the the we of And been pricing Truckload that side. a Intermodal kind see path on

what XX%, taken the of has well So right? load per per load print out the had leasing a project bit a much If looks back that revenue we better as of change revenue off effects than fuel, hit. is So maybe like. as I in the the

the volume have expect to to we up do way some in rail savings of volume, we on going to bids Based we that the we're right? add network. we this have half to the our door standpoint. coming back But that this have pick we're year So that a that contracts, building and from up X% cost are more in prove the have we year

different our in will new some to us that leadership improve we help think operating of the have place business. strategies We costs have

So, yes, we the had a second tough in here. quarter quarter

grow business to XXXX year and be grow of ultimately, line this of We back a And line business. by both believe the to get to we could margins that profitability top end expect the nice where that bottom rebound year.

more look the 'XX? had we nonreportable good think of segment, insurance your half into you've gotten we you you back you But any where losses do guidance for guys gave us When here. year. the segment obviously, as in more shouldn't that expect One at

But some look, on we Well, there. spend overall We do fourth to that hey, expect be the work will third do talked into insurance the losses some the then to still get we've work still in have quarter and the front But we XXXX. to to insurance segment there. that we about, believe things there. profitable and through continue some have

Yes.

earlier remainder remarks, year. be to million around Jason, mentioned the for the insurance of we $XX expect of what in losses the for specific, in So be kind we was to piece the

So fourth of and 'XX first quarters is XX almost which, combined, 'XX course, down and quarter. from that's considerably third the

will So first come, just leasing one piece. on and that That then comment it, call lap middle the business container Intermodal of the quarter.

So comparison. for difficult more will a that we'll be -- make

to for doing nearly the we when point. a entire look So XXXX, do of will with what been this we've comparisons versus up at favourable year XXXX be comparison

maybe okay, does mean Yeah, question. more one more one question and that actually

time little a that reiterate we'll So bit more. next

So JP will take our question here. last

or next question the is line of your from Your last coming Wetherbee question Chris Citi. from

Your line is now open.

Hey guys, keep I in will it me one. to thanks here. wire for the under squeezing

to as I you accretive breakeven to arguably year. you assume that's about be wanted assuming XXXX. just be want we better going of it that what a the contributes next Should ask sense, And said think get first 'XX? will that Xpress. we here I market have US in Ex to in to just than earnings a I Adam, you're US half about So guess,

revenue we side. we XX% do of in yes, of synergy on -- to make will hey, But progress represents even cost the the opportunities. 'XX. that if turns And prepared we'll be I mean it accretive believe Yes. we believe come XX% we'll amount mentioned side sooner. could market hey, And our remarks, in then, the quicker, as tremendous

if market perspective a that little will from sooner. we move So get help a

you. it. Got Thank

our We Take care. call. call. your appreciate joining conclude for That everybody, interest. thanks, our will Well,

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

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