Knight-Swift Transportation (KNX) 23 Oct 242024 Q3 Earnings call transcript

Good morning. My name is Chloe, and I will be your conference operator today. At this time, I would like to welcome everyone to the Knight-Swift Transportation Third Quarter 2024 Earnings Call. [Operator Instructions]

Speakers from today's call will be Adam Miller, Chief Executive Officer; Andrew Hess, Chief Financial Officer; and Brad Stewart, Treasurer and Senior VP of Investor Relations. Mr. now is meeting the yours. Stewart,

the afternoon, Thank our joining to earnings thank quarter, to for guidance. and third you. discuss market quarter and related plan Good our we XXXX you Today, the everyone, earnings conditions of results topics current call.

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

Our scheduled last hour. X to is call

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

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

EPS U.S. the was GAAP of XXXX the lapped income on compare decreased our quarter earnings X.X%, for overview and our Slide we I share turn Revenue, surcharge, fuel Xpress results the and basis. will excluding and Now to declined diluted third on beginning $X.XX, our $X.XX. by our quarter earnings operating X. Slide year-over-year The X.X% the adjusted revenue per acquisition at on of quarter. third as charts X consolidated a year-over-year adjusted was of

second operating adjusted which while third This with consolidated was in quarter quarter. ratio prior the was operating sequential modest was Our XXXX. ratio year, flat improvement first the improvement XX.X%, over adjusted sequential consolidated representing a the since

percentage and and GAAP interest rate net point investment million a tax basis non-GAAP also results. tax a negatively in the charges in million non-GAAP percentage point $XX.X write-off Impairment increase are results XX.X on basis in $X.X our totaling a increase increase excluded expense effective an were impacted on and the year-over-year from results effective a X.X our on by a Our rate year-over-year.

this This Now our noted for market. quarter, we X the truckload Truckload, on continue we next the trends to cases, In most least X ratio, these supported as has illustrates us. segments. worst be and challenging operating quarter. a slide. operating general, to several Intermodal revenue improving second cycle and operating income adjusted of adjusted results the were over further last for of behind been by of third each and Slide believe quarter sequential truckload stable Logistics and, Revenue, adjusted at view our each income navigate fuel may segments full But the in segments. excluding the surcharge, in

continues truckload, further modest bid and excess attrition achieve yet to our ongoing to The remain near are business new margins drag at market have same segment through experience The on levels. that improvement capacity continues has steady cycle term. at largely of in of capture where volumes. unsustainable have as facilities a reach early-stage we new At start-up but and the and much the are many rate network time, during stabilized improvement the supportive go. the so costs still go to Freight upcycle extend our to showing LTL a more added than rates truckload a operations

market port days in in October, across and of brands in disruption Milton U.S. quarter. market the early the of Southeast. extended The particularly our played out Helene week largely third impending businesses last Cooper volumes arrival strike, AAA the asset-based to based for Xpress in the as The quarter the prior Hurricane Hurricane and into the expected curtailing our of the October

market of align that of the events, and market when to are signs these strengthens. differentiator. and we from signs truckload Aside being for customers a is value the with freight giving These are unique the are security that balanced, our scale, positioned create becoming more service

on For cost now, disciplined excellence. we remain control focused and operational pricing,

to As to of solutions volumes distinctive allows retain we driving offer execute. any single unique brand than services we see could suite This solutions leverage to intentionally opportunities across across our us customers. create our enterprise, for brands, different collaboration and more

more improves As a market have this advantage. shippers and needs, valuable acute to become the we expect

Adam to it Slide I on X. Truckload over Now turn to discuss our will

Thanks, everyone. and good afternoon, Brad,

Although of as where positive seasonal signs, increases security we activity truckload in of brokers observe improve we challenging, improving in excess supply to including remain needed, reducing in average efforts to and fourth of stability truckload the our more attrition quarter is patterns cautious cargo recent in per quarter, the well ongoing remains awards, continuation of revenue project further their underway seeing some rate customers bid continue with an capacity a the environment achieving still sequentially chain. mile usage second their as over that

be offer rate than market. where customers. believe is to our suite unique rate as of contract spot average higher we remains are distinct scale needs the address our seeing our brands broader that diversified may to value we customers and average our for reflective acute This of not opportunities Our

were in redefine year-over-year flat was decline over business legacy X.X% year-over-year the for similar at by U.S. by in U.S. also declined U.S. Xpress, fuel offset a for tractor lap legacy decline as the as per of churn basis, network as freight year improvements at were tractor per revenue trucking a truckload miles a a a X.X%, reflecting acquisition at the we Xpress. of Miles loaded fuel past On the as the business beginning improvements decreased Xpress. surcharge decrease freight mile, year-over-year excluding the offset flat Revenue were excluding slightly in we Similarly, reflecting in essentially portfolio well year-over-year. Xpress excluding the revenue, per as the the surcharge, third by our U.S. surcharge, quarter. quarter loaded fuel

loaded slightly revenue Miles mile, fuel fuel stable, excluding and second over basis, per On a count a surcharge. truck excluding were revenue, increased surcharge, in producing the quarter. improvement modest sequential

Our operating spot per by legacy cost total in offset consistent Xpress operating per ratio for relatively in exposure utilization mile. second improved miles The improvements driven revenue the in as declines by ratio quarter. modest mile and businesses the revenue XXX and remained flat adjusted points, improvement its was adjusted were sequentially sequentially trucking tractor. U.S. with by basis fairly per

the remain much truckload, Slide difficult to more is the industry industrial the be cover increases X, LTL than conditions get pace bit in more while to on in supportive stuck we a where Now as in increasingly year-over-year though slowing comparisons production neutral. rate segment. of Market LTL appears

offer by are partly that to still solid and rate more expanding new allows services We experiencing lanes demand us aided our our customers. and to in network on steady business, our increases existing

excluding year-over-year LTL fuel XX.X%. surcharge, increased XX.X% Our day shipments revenue, per business as grew

The facilities. declined declining adjusted fuel operating operating shipment Our startup division and of of Highway X.X% to X.X% slowed operations income DHE, XX.X% costs Express, at acquisition the quarter. ratio was year-over-year third to per trend and early-stage XX.X%, recently excluding those of due each approximately per the of on weight The in Dependable hundredweight, LTL opened adjusted our contributed Revenue year-over-year increased July X.X% improvements. year-over-year. surcharge, XXth, to

summarize X, to where the expansion on Slide on progress strategy. Now recent LTL we our

in During opened quarter, the half openings year. service additional following centers of we XX XX the the first

Arizona adds DHE acquisition service end of centers increase doors expect year, the of in We network. Overall, represents should approximately key the Also, of XXXX. by our beginning and a Nevada to centers count XX.X% the our organic markets to activities open and both California, and XXXX service inorganic door door count our in in southwest X nearly the add of representing XX% growth more year. our X,XXX and this expansion from

work been acquisition and very our during business of have systems adding to southwest and expect the strong. and this offering integrating hard DHE at our network the integration been to into service Customer responses We've complete to November. the

integration are the about meaningful well. We growth our as the excited business expect value and existing adds this for opportunities to following

Over The and expand LTL capitalizing are operating the and inefficiencies improving operational chosen we our on opportunities past territory. to costs capabilities invest, margins. startup have to headwinds year, service associated initially to significantly

focus through our Moving go is as capture to with first our on continuing with beyond XXXX, customers, expanded bid we particularly volume network. cycle the new existing and

risk Our less relative pricing volume position yield. allows us to of diluting pursue incremental with our

by margin disciplined LTL long to further organic customers Our continue super deployment the quality. to LTL capacity. inorganic to ultimately freight our filling our density, geographically us will our and operating and our unlock truckload plans not performance opportunities within the network both and where to cohesive segment, in better and to participate this the encouraged in approach strategy, new and pricing enable support service unlike will intentional capacity national remain out expand creating regional network allow market, and allow network market short strategy term we should opportunities run. We the to and us a efficiency in our with more Progress growth Truckload, operational for look here footprint of and existing find in in a approach for us levels support be LTL to

rate truckload Slide to let's X. market soft the to Now public The quarter. most Logistics indicators on throughout spot logistics the continued faded with move deal as environment

pricing to adjusted our allowed XXX maintain second has over our operating quarter. business approach to the basis with of Our ratio points disciplined improving XX.X%, profitability

the percent both revenue year-over-year. load per also We increased X.X% and margin sequentially Gross was quarter. stable, second over

in by As to divert their discussed market Logistics Also, business shippers challenged markets. support allocating asset-based asset further to providers. certain last portion of the to of continue we our volumes of our a quarter, number a logistics is more business

headwind cycle. for tailwind power-only will when in asset significant volatility our through the freight This for means point it the a more create at Logistics However, division overflow can a it relationship the to amount Logistics but business, market business, cycle turns runway this as this asset with should service. our is of our ahead particularly flip to the a of there division

we beginning decreased increase of the of at but revenue quarter. down per year-over-year, in Revenues offset X.X% a XX.X% by the the XX.X% acquisition lap the Xpress was Load U.S. load. was as count year-over-year partially

returns capabilities to to power-only asset our the complement on more portfolio to and freight our diversified broader and enhance capital. build continue our a leverage We business,

Andrew Now it on X. Slide to turn over I'll

Adam. basis by increase X per volumes points This increased diversifying first will quarters. X.X% a we decrease year-over-year. business to a costs. quarter, likely negatively be remain to moves This we fourth on driven the our to hurricanes revenue the stable in quarter, X.X% improvement year-over-year. was overcame The in cause in be in revenue count. impacting the recent slightly Intermodal quarter. load improve the in in also early Thanks, reducing breakeven operating expect ratio and our costs count our essentially by X.X% profitable. progress fourth strategy XXX is increase It year-over-year density, the load operating In load projected business, Intermodal no of With reducing in revenue building third be executing empty We mix, sequentially previously and business with to whereas focused had volume longer

these should progress ongoing in expect We XXXX. this make in areas business profitable

XX. sales activities, our Slide as leasing, This and carriers, to Slide independent includes warehousing equipment, contractors All our Other Slide category on Now to and provided segments. equipment and support illustrates XX third-party maintenance. customers, rental, services insurance XX. such

first operating businesses. down revenue result represents over primarily the quarter sequential million quarter. the leasing of the within a improvement warehousing as winding driven business XX.X% quarter, and Other declined year-over-year, in $X.X The our by the largely second the All equipment was and segment modest income third-party insurance For

which earnings the we've are On also our stated Slide key release. in XX, assumptions, guidance outlined and

the As in ranges noted are but seasonality incorporating quarters, October of market expectations. what in expected previous an third continuation our have thus we purpose existing rather not differ and felt similar are on basing to from conditions, results in the may and for of inflection quarter Actual conditions the into we forecasts, market these far.

our quarter of in won't quarter. $X.XX the and we quarter the first Truckload XXXX our of assumptions be key assumptions, $X.XX of in range guidance for to improve we EPS them. fourth are underpinning project EPS and the I XXXX expect these sequentially be this In the income listed for $X.XX adjusted summary, to to on on range will slide, fourth the operating will so The adjusted Based cover into $X.XX. the of

and ramp-up earnings the a We segments All in normal which our fourth also expect seasonal Other quarter, LTL step-down will in offset profits. largely activities the within Truckload in projected

offset but and segments, Other and Our in the be the quarter by seasonal LTL partially first segment partially reflects -- Logistics range seasonal improvement slowdown this our our segments. All normal should Truckload in

for and timing service our conditions, drive unique leveraging in cannot scale improvement brands distinctive LTL and problems suite we improvement our margins to recover. opportunity synergies market efficiency, customers, network value of the outsized are margin U.S. growing at in we and of for an fully on and service capturing solve create improving as While the focused the our Xpress, conditions market of and the expanding complex recognizing

prepared our [Operator concludes remarks. This Instructions]

the Thank you. Chloe, now for will questions. line open we

And our [Operator Jonathan Instructions] ISI. Chappell we'll from question take with first Evercore

or Adam mentioned spot's comments your you Brad, doing and as contract. release that the better in Adam, than in well

and your help averages? market relates can frame business more for LTL sense leverage stand kind long-term business to where inflect. and you to us a entire us with ago so you on , of for of short-term it your a flexibility kind of to starts kind you of or portfolio Just the As relative when spot year now maybe can give

Yes. Sure, flex for of We're And contract in John. as low high XX%. still in that XX%, been double appreciate just business. versus as we've spot I that. our range able stronger to that markets, digits

be way a able So go terms being this to market. good in in to nimble we still have of

routing more seeing additional but we over of disruption in delayed flow of the And seasonality a larger U.S. beyond and then we're in guide. not our handful particularly that some we're that release, in mentioned of then still something was because the some their can And as from in we've QX, into acute And that But of a maybe bit to of maybe needs, carried the robust and has lot Swift. secure seen opportunities in and they have those we've that above need Swift. seeing seen we as what Knight, they is that brands, hurricanes. some a Xpress as seeing shippers are that QX capacity little secure from into

still are inflection the that really tells broad-based and they have to a needs, shippers, us So to nimbleness to flexibility the the inflection, go attrition, to to need for asset-based going some that going to accommodate the value market we as isn't out that the to expect in them. where that feel but -- I the also larger see is players real it think in carriers and means to we provide And balance. a the probably are there some those there and that still equipment of the are small where which difficult back environment, still have needs like we'll get

that So we plenty to the opportunity we business. aren't think same opportunity other have flex to capacity brands opportunities even is from of if spot more the on we the market as Swift I still provide maybe are seeing our And have there.

to add just would I John, that.

terms truck, truck for basis. In you capacity seated for seated room exposure if for of existing improvement per our miles flexibility, at there's spot a lot of our still on look

Should those having contractual system. the spot be more capacity, create in more to will, slack and there without could exposure create any if you capture to they're lose so And opportunities, business. we

to We'll Wadewitz move Tom with UBS. next

container with But whether imports really clear the year. to of on just to about enough seems maybe noise, increase there's Wanted better port West market time, get play and a in Adam and like life at it's same not get fair with rate just of this as might strength short your bit of -- view a the tightness a and Coast of the strength year. couple a next hurricanes ask strike into lot well. next how you disruption best cycle It the

than ball's hard more if of turn cycle case? think have I as on or thoughts you But next the point. year clear So into gradual of you're -- a on But base go the -- at this these not optimistic might it's it's how one days. if know probably I we know crystal kind that cycle kind don't any a to

Yes.

has months everyone months So about been Tom, for I predicting think X now. XX

to that's really where hard going land. it's tell to So

start But then I throughout up the sharp pick worst to that the expect the in to is and see mid-single-digit real I improvements to bids we'd -- us. here, I And like as don't year. do that that there be inflection. to build see behind think feel a low expect the

it's a more create And But of that inflections the think spot I sharp those may you somewhat probably keep that's dramatically. the almost okay because of I small gold in upwards. jump some grind rates from rush the for really capacity think the because a market. -- carriers see

the over the are see a amount versus So see and I of have now. larger typically or that's players small kind there better an of performers carriers, out to the slow think so playing well-capitalized I brokers as think market you just It's positive. opportunities that I progression it stronger building progressively that's a asset outsized time, how

rates closer I bid late up margin season, could they've that. think single and perhaps. high There's to make where go companies public on part And to recapture long the ways in the digits end historically, been to a in included still up, of ourselves the

So to to cost our with and continue customers. go, a get we've better our improve probably there we productivity structure put to to again value margins a in plan ways focus us bring to on also but got position to rate, and

got I'll the in We bid largely just add. front season us of here.

escalates positive have a lot of it we signals. don't season bid early So rate, are what and seeing as we But often, that is from capturing progresses.

rate we we us got there's no to walk we're lift of as to is environment understand to spending longer certainly, we as through the we were But as lot hold be capturing the -- trying year go we signals this. that's case. still but to XXXX. we a a to Generally, a work ago, rate So think rate. going But

what's And to the you telling does Tom, I you past maybe how we're in still feel the you can think, see is busy going strength And market really it set point. that inflect. Thanksgiving and weaken? I will there, do the I does be where Or get tone rates for up once -- I because to think get think past most then And think once December? that

Inc. We'll with to Stephens, Imbro Daniel move

related Maybe last I question. that up follow want to to

you year. think XQ to next into side. So I the still expecting you're kind pricing accelerate sequential of sound to and XQ on improvement Curious expense like

maybe today driver equipment cover just are underlying hear margin any rate We great. enough to inflation up, you and/or would improvement there. the cadence expense or the thoughts have we on improvement cost increases laid to love there out get insurance cost wages. actually Would your the But year growth up, next Or cost thoughts just XXXX? to through where be

Yes.

have we in believe we progress think safety we the think, been, in opportunity But challenge The has some and developed. I managing the initiatives space, given business. for insurance expense a So expense keep in some we on how opportunity environment area claims. given that to that have around still on we stable have has our like the or I feel litigation some just make cost of side that some everyone our

I of from we're today, in still than the ratio our think And to have and our and higher process becoming there's still more standpoint so think equipment some of efficient like, improve opportunity would trailer-to-tractor I utilization the to a an rightsize equipment. fleet. we we

XX% XX% of increase to When our share we pay, with rate would we our driver of drivers. typically, think

and to a we standpoint, see Daniel. start on we that's market pathway trend from there's to we really up But we where continue, retention rates of and would going a see come a like at. for it's feel then when the so maybe recruiting that improving depend something to And look consistent

industry, XXXX, convert think margin into to improvement. rate we're any to, have going improvement an I as

I so. think

to cost yield getting getting slow anything, keep to be inflation mile you're minimum, down a while while basis if will focus our the -- margin a So per improve on continue you're to margin.

utilization also with our improving will cost per I our help believe that also mile.

start then with load to you get to start it contract the you of get count and additional starts spot and think I So rates. rate market, then typically

be get that Again, in We miles, the get you low help then drop early, fixed the don't count, know you it effectively to But more short-lived. more and and fourth yet. may So rates your as get bottom to cover you line. we're you to seeing costs already it's start quarter.

inflation if So standpoint, really hold on next or, not, have to steady improve year. we an for

kind just something decreasing wicked -- more of of through fixed go lift general think the as across seeing add we've the kind at reducing give I today. and would it's a on see few is seeing different guess inflation that's as into hard most I -- starting costs, I the We're one that been rate last and we're work cost year. this economy. normalized maybe environment. hyperinflationary cycle the a -- our next we it going of elements cost years, in to us We But

our sequentially. at look our improved points basis OR. businesses, QX XXX you from on we said legacy We If

entirely, Our because cost that right, we were basically per mile on mile. essentially drove flat rate, flat on

think So intelligently, we've impair we benefit are ways that in ways us opportunities work to to on see been capture improvement. we which market cost going our don't market as at ability but hard

We'll with Stanley. move Shanker Ravi to Morgan

at for we'll upturns said, of and people what of kind brokers." like finger that rates the less on brokers see mean I pointing compared trend sign And rates brokers, are to because the carriers, the too this at follow up because base does shift the are rates a comments mean on were cycles? How the on of like into towards that cycle. and in asset-based this a volatility point away going want of too the to past, a also, downturns their an a for high this similar in is potentially you shift? the more shift "Hey, low forward seeing Does if sign, noticed customers previous upcycle? Like positive from asset in you and to

Yes.

in these seen Ravi, think, I the shifts past. we've

have our at some can lower of customers than and shift larger chain when rates really to cheap, their and towards or that -- comfortable the the supply players get market could When going market brokers when brokers to shift -- brokers asset can small turn, You've carriers. rates do seen what less the been. them when things asset-based are the available the they it's to towards capacity their start feel mean think with carriers

think of playing normal that's would. typically all cycles I like out

to is lot I around difference starting we're comments a think hear security. one cargo more

I across industry. the think there steps been has a of cargo rush

the carrier's We larger all power-only very a it the -- makes we proliferation carrier hey, We I time. certain call have a it it used or do power-only. of to we a like But it happens way see unusual secure. a think trailer we'd it's be to it [indiscernible] that XX:XX, hauling in see smaller because small we'd concerned feel a into about when Swift that hauling carrier safety. probably not

it it's common do And really and could Now practice. effectively. well a you

there a steal when make found some easy actors to load, have to who that and very bad way tried with leveraged interact to shippers. are and there these out have especially it carriers But small and we've engage

equipment hey, when customers our there's several have come washed to of start dollars a having for -- opportunities because, shipment leverage us and of quickly really our so been asked hundred a out full load over stolen. on think saving I a period gets you a to time who And of couple

impressive I department. and I what I very have all mean a one year, times our many of when security a X trailer we business from one stolen. on million we more the brands, of loads It's how things. of do our a think may we security we standpoint, have a robust can count hand and haul full And between

see We have visit watching shouldn't have closely. Very trailers. of high-value few the operations, get type locations we're and those loads customers all our they very team drop the you to that And where security. that's and tracking

some a of become contention has customers. bigger that point with So of our

over to here that gone much months, now different the theft in cargo the past. conferences it prevailing is last few really, a discussed wasn't I've when, And and topic

the forth theft. is thing outside that changing on I regular shift see and cargo and they But broker basis. don't around that customers of asset-based think shippers, our one between a I that's So believe I concern back new.

We'll next Scott Wolfe move with Group to Research.

Any it other on seeing pickup not any rates Swift spot don't businesses? in thoughts just why they're the know. So the why on Are is I that? Is and bigger? because lower? the idea

make usually I back you're So just price utilization. margin right? drivers, want then, Adam, little think some historically, to you like your about whatever if back improve because point a And typically, improvement, margin you I'm sure less, giving the understanding get, on right,

market get that bit that view because that some It the a and like tight. whatever You is get maybe sounds more. get price, margin gets back understanding little at I you in right? your least Am you'll

you equipment, I Scott, have basic then safety how get tough you'll over felt get doing several effectively, have is we've of market, inflation improving improving to the it'll if goal, in come does we there. that. like And much just you that that's lot turnover, from, Yes. last back you'll years, things through mean trucking utilization the utilization rate. And get help. because your an on that when just and managing really grind But also our get the a to more more again,

-- inflation the any year-to-year you'd And so that'll help of offset have basis. a on kind typical

Scott, that's going but that's be flat mile -- way, that keep to cost improvement, and or even objective our better, is here to for then any to not rate may margins. it XXXX perfect to flow per that be So able

and your most Scott, -- just question, we it's has have, the it largest Swift the on then equipment, most And brand trailers. is Swift the

able solve certain big and challenges. -- used the be to being to Swift call they're especially to to that ship quarter, Swift so And heavier for able fourth when in customers

instead out. may call to Swift pull of that or be X X And X so just and able to together have calling carriers need, them they or the they capacity figure

having this, we bids and calls -- those identified multiple really how why those that's now, to that so And brands flow. start how

so opportunities we're we the with what problems customers. for Swift and finding U.S. Abilene where Swift these leverage that Knight, can with the take doing leverage additional customers, solve is capacity we leverage Xpress, but win do the then to can't find And Barr-Nunn, with to

do you access one they like feels it the giving And them into we're brands. it entity, So but to come right way. multiple

going it's each brand. direct with Sometimes

through Sometimes just it's it flow if could project. a one,

really a and on And solve Swift sheer the depends with those opportunities customer. of are size has -- so the that's of capabilities to problems. But that the what starting lot it because

We'll move next to of Ken Hoexter America. Bank with

So you the in online brought facilities of lot a Less-than-Truckload quarter.

had double was it almost think you year-to-date. I done what

So we that it margin targeting that. on market like market, kind your And move progression well, the you're -- the how then the looks within thoughts the see -- do pricing within as Maybe leave state of you of it whole. I'll forward? as at a

and touch maybe on market, progressing. just that on how margin I'll profile give the the Maybe thought and see let I'll then a we Andrew

we're expand good seeing that. network these we been because of the think headwinds there's But I with it's opportunities aggressive. look And acknowledge hey, it. been on We we as some terminals. margins still the improvement at hey, grow we it. the where XXXX into in margins. and with network, growth that, grow XXXX And in year we invest it is the in as year and we top line into And

had as dealing that Nevada are of And important Truckload addition very We and close large have customers as really we're national relationships like lot we California shippers with excited market that about very Arizona. was a really and of DHE. players. the that with well

piece and little AAA big the MME a we of a so to reluctant until And California. some were them. was had That network them leverage for

we so networks connected let's soon start?" get we it -- announced say, as "Hey, And when the our DHE, And out and several in. can "Well, reach let we customers said, as we had

like number." have the And network them. So next it that one to done expect in have we feels phone probably XX to days. X to one you system, one So

accustomed DHE real that to host they think increase to tied to a there's to flow they're of there's would there. but hauling, is customers broader a that a what that so network, now significant that have us we volume be And shipment to in want opportunity some

And players Ken, the call there the some is, of gap as the remarks, we then on than out that margins we, close the to mentioned operate that larger currently. to feel or better us where our we pricing like kind have still on improve from prepared at room are

network we don't to that we feel the need into grown. we've so pressure And like pricing grow terminal to

to towards getting start an then that to round we growing nationwide inorganically to network. about find so And northeast the to opportunity organically into grow really look what obviously, the XXXX in built of excited and we've we're out or and out. kind And market

grow a And from that maybe how you see want standpoint Andrew, on as those we into progressing to we facilities. margin touch

and say revenue. of Got just upside the about and the of way, cost in versus QX low point I'd it. terms on map sort it this think -- QX kind of is down the

So this quarter. -- have occurred investments heaviest we've our

behind us. we're point, our but going And to filling to we're largely, growth so the in additional big this from them. And is going some out start investment organic facilities,

is overall. have we usually maybe that freight it get XPL of of help with different here path to We we some converting going Once start the to to going that's that But into a a higher-value than look going revenue. we're to our idiosyncratic bid cycles, be sort peers. little

go strong capture because into fuel rate our that We're that our able per as X.X%. and way sort being is of we'll QX to restructured. ex we see believe QX hundredweight revenue was up saw network You of the be in that we --

able we're we're haul length of length as capturing new to haul Our longer and deliver to growing, regions. of is

get to to I it needs cost I getting quarters. margin, rates our just probably delivery where start kind and XXXX, favorable line turn going pressure early a efficiencies But the we at few bid -- we going is and for dock sure our and as So our is expect more and that that, were we're our labor corner by to of haul pickup question be. making better and cycles, your into to utilization expect continue on

we're point in XXXX to was low investment, is we pay going off. an around that the that down math of somewhere upside the think expect terms I So

the really -- where there our need we built grow in best hundred couple kind we're grown this year, just -- our goal is Ken, competing we've with just And out companies every to we've OR just into year of start and points a to there. path just dramatically basis path down network keep down marching a is public where as pretty to we we're marching improving

Wonderful.

here, clarify then see from assumptions, your the improvement quarter, exactly your first So in target and kind talking there when start -- just or you then, high depends to about you're quarter your to of fourth it guidance on... XXs,

improvement the some Yes, we'd yes. 'XX. in second to of expect Yes, see quarter

next move We'll to with Chris Fargo. Wells Wetherbee

is guess. how U.S. I the progress I Xpress going, was at curious

in in a But that's for different to pull rates. of the about integration's maybe need bit deal? to a I there's better And to of customer a think do a were it's you margins gone? flattish any environment get little start quarter at the sequentially. Got terms the different how going out that the of really a the and all, you rehabilitation or can thoughts, sense and the outlook Sort longer-term talk how bit of of of of portfolio, that value it. freight book if maybe business

Chris. the And had function than that's freight difficult to certainly There's freight revenue deal you Yes. right? cost that that synergies capture, been job challenging X You side have it's more with. prolonged a We've That's more good question, sides think, cost have of have really a I of we then anticipated, capturing great on and done, of originally really we the a market, we've side. market synergies. a having really to and

have our Swift the Xpress on substantially per mile versus gap legacy cost the Knight per U.S. of the businesses. on cost and We mile closed

safety these kind to in the time there's be Now more areas take that are It's and improvement business. in shifts, still improvement. that cultural and that's show side of the would needed, that of

versus have really ensuring safety that our having we drivers, kind productivity and of bringing good right that's we're in the drivers. right culture coaching, So the relationships we're around that just with

improve terminal which And right before. a those build that to didn't network less the exist period. a mindset. than relationships, we've And out year then having We rapidly so terminal a got people we've did having function retention. over is also driver that right of very to network, And the a had and with

through side cost But comfortable the So the business. of the like established, made feel to on that with been see time it takes we've business. that's we're progress very the some flow but I

have. Now there's that also work take replace terms on through, some, we I'd can say, equipment long-term equipment leases as the that and those financial you with purchase we business them we better that with to have time the

So but the the progress there. the feel on about side, cost levers pull still good

still at we've to is and there's rate that the business in mile market Knight gap it's between challenge and there over-the-road challenge managing the Xpress been and real and so. a -- do it's how a been that has Swift. per room through, through, the And The of to lot we perform U.S. a be worked

that a terminal and we've that between on So mile. better runs network that developing can really, but you're create a worked rate working the we've And been of sometimes ultimately, networks close to standpoint, length on But that's shorter haul, back trying per achieve a when I from market tractor, at but certain you have will in gap revenue on the much rapidly more our progress. fully revenue wind some we think a side. that per

when start that probably U.S. that's see think you'll the Xpress. I expansion we purchased forecasted to when originally we margin

cheap, They also pressure good has. on dedicated. a large just They've dedicated some is They feels have actually felt really pressure. every carrier other When felt there, dedicated business. like pressure over-the-road

really a good where have know asset to Knight the They Swift. mentioned felt that business. logistics we performed on have complement public a that I at They've so well. similar has that. do others performed to we and side. that's good the Swift, And had at really U.S. in Xpress and they what But space

is conditions close faster. us that So gap help the the over-the-road big business, and rate in will challenge market certainly, better

with We'll JPMorgan. move next Ossenbeck to Brian

are guess, puts topic of fleet legacy Maybe the USX a maybe a bring the tractor in takes proactively little and count bit little just earlier a tractor utilization. like that across follow-up quick some year. of do of so quarter and in the you normal there's bit the broader about how brands? you areas first maybe some seasonal there's It still Adam, and down utilization decline But count. between general thinking different terms into you sounds in So on, I need to

pretty maybe, about it probably Intermodal just the sounded the the impact of LTL as can then you and -- and And financial it Andrew, was hurricanes? Truckload talk Because well. impacting like more impact broad-based,

that an sort So expect should recoup be about that to here impact is next that of you in XQ? Or is something quarter? thinking we

Brian. your question start here, with All X-pronged We'll right.

tractor that felt we the earlier there's on mentioned some count, some Xpress dedicated of So U.S. on front, been business. and the pressure I that, the

that the So tractor quarter. probably and of there's some network they've started to count offset that we fourth to in costs carrying that the out we've had, of bleed need the some already

expect QX average so into decline We'd through XX:XX we reduce count why on Xpress like that's a you'll to see we to it after be an QX through of stable probably the QX slight And on the that few just help -- a get pretty to that adjustment, from tractors then that. per and tractor work number. of to kind and carrying hundred is some U.S. that's cost need QX --

Xpress of and of. want think haul haul is truck shorter replaced about drivers but think live to we've also, I our we've utilization, open regional in out length low that that maybe length I where talked longer And done incredibly certainly were freight come realigning some within the some U.S. When networks their what of and the with side, hurt having the of network. rates freight at were that we the on again, fits

tractor, a have that. And as rates result so improved less miles per of but

miles we've best to but adjusted in. looking something and networks at strictly their truck that similar when is our on per network network driver focus because some the a it coming of having retention with comfortable out day up supports of when also shift. that given in would just result per they're a merged we you're did and But per really that revenue this if So show this as we tractor, Swift, we drivers

when look you're the a funky that. sometimes can so numbers working little And through

about questions some you on that asked want to, Andrew, now of you you if know can hurricanes. Andrew. touch I

the period, almost U.S. part Xpress QX our October. Yes. businesses our early final that Brian, or in that in and I I AAA think carried us some and in would say business would impact the I were did say into on hurricane of region heavily. have over exclusively Cooper this, that

So they were impacted. disproportionately maybe

So there on LTL probably permanent is business. some impact our

we here us to but have in think seems it's this at slow point. Intermodal had largely a start behind QX,

what's U.S. Intermodal our on impact overall business of some kind our It's the on impact had perspective it But our a truckload impact some really Truckload I would impact but and Xpress, global it? from didn't for LTL business QX. way. probably -- permanent probably of and So our say in

it but some Yes, to up for impact from the -- on net much QX so you Truckload positive may business. LTL. when pick compare the not in opportunity QX maybe be a on you Maybe

Brian, You type the may same being of don't net that But we side, on truckload the, positive. have see rebound.

it difficult done us impact it's to Brian, have brought financial And I through Yes. of really terms held that it in a likely would opportunities would have volumes, guidance We from the quarter while the we to Truckload say our can side hurting business starting our the add see quarter. the I if we're with started flat that's to here down. where down It is, with percolate the hurricanes in QX for would ago. not what for fourth what come quantify on

Eric Barclays. with to Morgan next We'll move

over as discussion of length can reach if not improvement customers great advantage the have for come it? you've the the the network you should sits the as haul. have single take more keep a years seen, high think on to of LTL, in a of is digits haul way up to about can the naturally just you that of with good come wanted go Do of next I Or back pace And mid- you sustained on yield and that to maybe? the runway where length more couple just now? handle like today pricing to

We a freight, the the out, right? settle larger I component that indication why longer and do obviously, kind but start grow the But some and maybe just exactly and network better expectation. see land process really until, have heavier as fleets. expand RFPs. don't a margin DHE of as those know exactly we margin may we that's regional see start of We one the fleets to certainly, to that, connect density won't us some some the give we will we until in expect flow, will and where season our some working the would haul freight length that does don't We of yield that to mean -- we than obviously, of we length sales number of and reach. haul the I mean early that reason improve is know where our we the of better the believe shipments bid through of is

mean I a think changer we was California game for us.

long to length participate even we were had until not haul option of freight, in California. customers talk that viable we we As for them a

desire of capture. we terms I in to on of highs sort bids. talked about We've DHE a in demand, we've in to as participate happen that for expect good so think, the been, November. lot response and a And we seen and customers the We've approached us now for so of way, network shipment have in in and those our just I business, -- guess, can clarity, all-time surprised we on, count that and

for I every strategic capture every So is us customers. our had, outsized that opportunities outside not an with center California, importance our ability location, the to our view, think California in has same. impact not on service

a that we -- feel like right we're give important tailwind now. some what's to us So of is going part very

with Majors Susquehanna. Bascome to next move We'll

look-back mid-XXs with for make it, to good But could year point as look to rate. percent early full incentive range been this low know at there. had I deterioration, percent. at us no been year just from just market, own of is a point next meaningful this there's where full as, truckload where has guide the your And year. the if you've year If in on years first booking different the something cycle the about a uncertainty it's Thanks meaningful an for in sequential this start there giving years the us mid-teens today? about I look historically and conversely, seasonality Is historic sequential that high all in there's simple recovery budgeting have think as the starting seasonality of been call don't that outcomes? strengthening that quarter you as unreasonable

Yes.

business, much apply we're in X X difficult differently if just I consolidated today. than business to or were think we mean I you our so look years to really our it's ago. a historic at comprised look-back

component. have, we're have Xpress warehousing We're U.S. larger segments And still digesting that the leasing now LTL -- You performs we different now Other the as All business. and seasonality. normal got where some obviously, are to trucking there we've

has earnings way changed from our quarter. it progress So the quarter to

feel we favor, we'd bids probably in what QX expect, of same do be QX. out earlier. of like playing the mentioned think will we from volume to adjustment our is type the I seasonal of Bascome, like kind But

the in Xpress and and of in facilities to better we're rates and first going trucking, better make little the you feel. on feel play sometimes believe, the sometimes, can cost a if XXXX, financials. half the are feel to it you than as we and these look better company the look out where I continue year can bit we come LTL you probably back But will to than control grow And into about begin our we we progress half, with look, U.S. business. a than you And

-- And so it's didn't we for full give year. the guidance

don't want and to cycles insinuate But don't today know it guidance We've I and to trying directionally correct. our to QX. company is this a be apply So challenging, QX I previous would given bit for anything.

year. subdued, add the -- that's right? truckload so into to and a And dampened the X in core last that. also and has amplitude would argue more more truckload you've seasonality kind Bascome, the the that Whenever broader we expressed of add get seasonal truckload on for going earnings I cadence and as years And has what stronger now, I been going the and What market, Brad. is would -- carries market this seen tighter the is normalized throughout volatility being of so

right. All Yes.

there's think can And weren't you we that presentation. concludes call XXX-XXXX. able if now (XXX) I our you probably that like, you'd a And so to question. get of few know your I to

jumping But quarter. hey, we talk appreciate the you we'll And everyone on. interest, appreciate to next

Thank does conclude your participation. program. today's This you for

You evening. wonderful have at disconnect a may and any time,