Schneider National (SNDR) 2 Nov 232023 Q3 Earnings call transcript

Thank you for standing by. My name is Bailey, and I will be your conference operator today. At this time, I would like to welcome everyone to the Schneider 3Q 2023 Earnings Call.

[Operator Instructions]

I would now like to turn the call over to Steve Bindas, Director of Investor Relations.

good and operator, you, morning, everyone. Thank

President on and Chief me and Financial Logistics; available President. today, on Executive website the Relations and of Executive call of issued President Executive the the release and at Vice release. Rourke, Chief Vice our earnings Filter, Investor press Jim Mark are Officer; This Group Executive Bruffett, President schneider.com. President Transportation investor and today company Vice Joining Steve and Officer; Campbell, Earlier an presentation are section Daryl

Our forecasts, provisions call the Schneider, forward-looking future securities will purposes include remarks applicable for under plans these about expectations, statements harbor for and laws. prospects safe federal of the constitute

on current forward-looking except Schneider risks Forward-looking investors and risks uncertainties today's duty those recent by review Form limited call, and urges update uncertainties and statements risks disclaims annual made the materially to most our and date results not law. in including, this required involve but in from filings, the statements, such The our are expectations. to, SEC of statements discussed to cause company could identified actual XX-K. of report All that as any to differ release. earnings as

reconciliations reconciliation the Pursuant found today's includes financial call investor most addition, in and measures. of can directly GAAP our Regulation In to G, measures to which a presentation, be non-GAAP comparable any referenced during earnings release

to turn over the our to like call Mark I'd CEO, Now Rourke.

third market before today. Steve, context the some going to with thank for our to broader you, you joining the Thank good I'm quarter Schneider call morning, and and everyone, on results. getting start

current an elongated cycle. We are freight in of trough the operating

muted that been the inventories freight volumes some seen has and pricing cases, normalized, uncertain below Despite are macro slow better year, shippers in carrier to the costs, capacity part of for an facing while are operating we've outlook. have As remain rationalize.

to materialize. on to that begin as were strongly opportunities shared they we quarter, positioned we capitalize Last

did shutdowns unsustainable we targeted reset to third competing not quarter, the recent equilibrium. and reflect While in and of backdrop, We pricing near-term context the pricing the rates to the of expect With third begins opportunities let as believe nature pricing few quarter market the a new operations in for of during fully current year see improvements. those brokerage return me performance. have that to third the Snyder's quarter expectation provide improve

impacts of handful progress The this a there by cost the the market. combined portfolio earnings. and items were expected forceful network be elements the challenging, it time, recent as of At We of encouraging decline result realized, in was emerging our sequential and offerings sharp to earnings in activity broader of impact our same certainly pricing was the resets Intermodal. and promising quarter signals truck was especially our compounded pricing the and a in in is of

to to context additional of So both sides it's helpful provide equation. the

third decline cost areas there rather a quarter. just fell favorable earnings. in the the Their category unfavorable that the has a which in the items, all quarter, impact typical Regarding unfavorable to and I of than were quarterly items during cumulative contributed mix sequential several mentioned,

relatively we talk earnings. not over time, during do as We the unfavorable dynamics our fuel has course fuel quarter. First, had the about typically a of effect fuel neutral on

prior the in However, quarter fuel compared quarter run-up a to third of in costs. factor negative rapid 'XX it the the notable due was to

this bad area. expenses of much expense normal debt for insignificant in we higher we Next, had than have typically were as amounts and

of customer uncollectible a receivables quarter, expenses. meaningful resulted combination bankruptcies and in This

Also due fact, these in part In on business equipment gains represented sauce, results softening volume all to equipment a compared a costs market. typically million productivity. expense the aggregate, in In basis lower we sequential used of yet of more core in experience quarter the a of year. to are $XX outside than the were they headwind price, of of and items as the our second the such are the These elements quarter. full

Volumes steady, asset our percentage utilization, in but from business. depressed the truck acute was business those let's We the So spot of double-digit outpaced benefit part coming improved of been by reset pricing tepid. have which network unseasonably to but loads far impact this was compounded contractual in market. That was transition low most topics. by that the

out margin called within portion a not these In addition, our of truck the margins the this resided The and of decline resulted items of business in quarter factors cost in combination profile majority network. in pronounced in is third sustainable. sequential generated we the a that

unsustainable have have have cost on impacts our remaining of due quarter that fourth implemented our proactively significant the a initiatives basis. replenishment. variable equipment of margins costs addressing the been network and XXXX inflationary reduction cost enabled the of and wages the Yet contribution rates maintenance therefore, operating We a at and is to of portion compensable since not growing year-over-year book

We are and freight price prepared demand the supply more further. pivot to market when targeted condition compensable are diligently and rationalizes pursuing recovery to

On We in third able absorbed now of growth and tractors a new expected Transport we're quarter impact, quarter brighter Logistics start-up us deliver deliver exiting addition note, stable our M&M dedicated X,XXX configuration. sequential meaningful bankruptcy organic Midwest margins. excluding results. the business The and customer and to Systems operating dedicated the business a with contract combination the still of continues has to a and activity grow in

confidence momentum series giving a continue. in a will that have of of of the of Dedicated start-ups to fourth We new business the quarter sight in XXXX, and XXXX our quarter line us first

local more that serving offering the at relationships growing Also, their deliver drivers we feel and address deliver level. our in we enduring enjoy to solutions our deeper customers, service our differentiation markets. strategy their participate and relationships leverage unique experience deeper, our ability professional deploy end in dedicated enjoy strain as with the are We customers how deliver supply those

the as the KC work as improving We American with The tender repositioning. such the to even Mexico out convert improvement service benefit of per the impact count financial percentage the of believe and markets Mexico order and already year-over-year and pronounced a a tender balance opportunity import Southern the Revenue X% combination automotive having eastern the contraction western shorter verticals allocation indicate Intermodal transportation is network. objectives. grown aligned that in was order we XX% a to is continue on across there modest network is California we its critical mix portions into to since our volume -- of balance work Overall, into CP and ongoing Encouragingly, to through we Turning season, large allocation freight discussions segment. our of as Despite lift customer of both the down volumes a and several in have month with network. of conversion the container of customer in a meaningful the retail implementation. with relationships, the haul not saw higher price XX% entire empty improve of of throughout to lessen we October. sequentially over-the-road to North in their volumes largest intermodal see consumer and over-the-road products, by XXXX regional a change more quarter

container pent-up growth productivity. XX% We asset have chassis intermodal opportunity least in at of and

margins pressure volumes Finally, are from under in competition. contribution our Logistics segment, intense brokerage and

as do recognize Schneider. his last want will Steve's final X.X turn we company's many brokerage Susan adapt that, we our over entire financial thank and the While realities remain in the to and in the it contract all as invest current to carrier business to modernization the in will power function. allocation as questions. But while of and our strategy multimodal logistics X.X. to soundly nimbly get as that highlight capabilities. I our be and for I best contributions want over before challenged, a platform him the I season quick power-only as to growing I retirement years up advancing before earnings profitable your Buffett with capital freight for well market and Steve company's I wrap wish shipper to this continuing in the well

I'm Campbell fortunate Darrell. team and have of to very taken experiences bringing to leadership rich Financial also and financial he the for is Welcome, has pleased we feel Chief our Tom, that him. Daryl a Officer set

of I'm be board strong Mark. to thrilled on part a team. such and Thanks,

Over thank organizational contributions role his I active on also an on moment our to playing in plan like listening, a his I actively tenure. our and during integrated priorities Steve to beyond. in transition the well-crafted the of past will months, which a learning on been Steve have forward through while the been into and diligently and strengths executing for XXXX continue business. end top building I've take look to would also significant the Schneider I to engaging year. getting and executing

some second few comments morning good unique a we you, call. decline my that everyone Thank in third to third. on from XXXX, space add the a quarter, this good color provided our quarter pricing on of results, quarter since Darrell the in to given and been was sequential and Mark I'll amount the Having transportation perspective. from the experienced the

years. over not but to past most years. all would prior freight as what of This of overcorrection XX the the one in freight expected of that have cycles environment I of is We midst of the characterize the the happened couple all this an decline

our businesses, company. especially is temporarily in such, network across masking As otherwise the difficult execution environment, solid pricing the

still our in configurations. acquisitions, to are of years dedicated we diversification proving and do, segment. business, that the to earnings strategically through is we've in Truckload beneficial. several have and and The the our be in dedicated work total over over construction While XX% organically both portfolio our supporting past trucks is pursued growth

mix. well more growth in prominent Also, even our business role an strong is for our and positioned portfolio intermodal

logistics well These think proportion to these We've immune Switching are relative variable job capital. basis. managing on growth fourth quarter. been on and are have a dynamics our team Our force compelling improved quite performing gears are of and year-over-year effective the the real, not they effective I engine has to from costs volumes a our a in are but and declines, at businesses, difficult productivity basis also with sheer price while return the done overshadowed being efforts double-digit on by in areas. an market

through the our and to seasonal no we project are no expect lift continuation We assuming repricing in therefore, our activities further conditions, that across current and operations. little book note now are also deterioration volumes from of market would activity. across I expect business pricing therefore, of or the

mentioned we quarter. some items the do will cost that Mark the fourth of in abate Also, that anticipate

earnings For the example, quarter. quarter, the bad did negatively neutral but than slightly impacting we fourth expect of debt fuel be it as not will in we to third at to positive expect level the the in some there quarter. that And be third rather expense elevated

to gains $X.XX. levels. factors, headwind to equipment On quarter EPS is lower Considering than and for be these a be continue year third sequential guidance we full to the updated $X.XX quarter other hand, expect fourth and adjusted other our

Given year-to-date is of our $X.XX fourth guided quarter inherently EPS to adjusted a $X.XX. $X.XX, range to our of

fourth So quarter earnings or quarter modestly above expect be levels. we even third to with

of the We of part from period third of will the also define time through the freight first of believe quarter cycle. XXXX, that this this XXXX trough

viewing happen. information We'll on transition our call, currently much a catalyst but that's and could freight a XXXX as with provide of year earnings improvement, very accelerate could more next that fundamentals the steadily slowly pace improving but market barring which we're

on Turning cash. now update to uses a of our quick

this been to throughout I $XXX current XXXX, of and a services by that and frame. our I'm pleased which our the more for has $XXX thank our organization a scale to a guidance He's that, continued sheet. growth OEM Mark under over guidance associates complementary further remained the operating like that great million I and from accomplishments since a to know We of the Schneider are has stable on CapEx Darrell organization It's updated have acclimated. increase million would for year. inception shareholders. stable $XX and CFO as and strong authorization. and rock net team $XXX proud as balance full I'm narrowed set at and made backed in to CapEx Schneider's XXXX only for benefit to range May million since repurchases success board. million. our also, And closing, the up Our serve it already production predictable year and gets activity and we've time In privilege adding solid year as value, also share will will

to on And up So that, it's have with your questions. great call we'll the open him team. for the

UBS. [Operator Tom Instructions] line Your comes first from question the Wadewitz of with

to congratulations with wanted a tough talking pretty And Yes. you, with at over Darrell, And Steve, the I ask, years. on the cycle. working Schneider. you a position you pleasure to obviously, new

drive the business, guess, clearly, Mark, do about that the on something you for if how if what guess think that to timing on we the the the I business waiting transition And think I side time improve. about talk in you is to think could But or or there's it's I just and about really levers how should know frame? network I and don't important. tighten? price improvement for possible cost market

Tom. Thanks,

think I both across having and arena, we're there's cost opportunities with. board, which into the the on success leaning

the we market. not this as It's uncharacteristically side supply late Secondly, this in more monitoring been the so cycle, others to and have of been improvement. seeing stubborn be

of a some of governmental effect. metrics only published have that bit a that gets the we little lagging So at not look

experience as correcting more seeing accelerated brokerage into at are other health an lease market contemporary trend we're if we the what continuing driver on pipeline have driver. new such turn-ins And in look to pace We to, function, are than and is particularly recruiting of the as going all the from at in seeing very we that our visibility we're front. community into capacity our also the on things what things those and with closely owner-operator look in carrier

that and the to And correct. should those so the the start quicker first foremost, market, that, I think tougher things

we So continue do year expect one new things that's into the that see we'll we the those trends. of as to that get

we book. don't sustainable is targeted season. the do renewal we second and coming opportunities what believe We the price Secondly, identified have particularly we positioning third quarter through, improvement across think

business. So of rightsizing we capacity cost and of we quality, our elixir think revenue network think an we think of as improved for

follow-up I guess quick Intermodal. And on Great. then a

think on You you pricing volume for the to than the do interest improve optimistic stuck going while? you to help on shipper keep margin that kind locked us Or improvement comments potential think do level lower on at that will sound for is is in that's volume been margin side? 'XX of in the normal a that

Tom. Thanks, Yes.

have we couple margin into. a we're real think I leaning of accelerators that

we First, we where communicated the our running and percentage to of they customers with of month looking so XXXX the and been series objectives supply a strategies the discussions session And the highly their into We've encouraged. been and key discussion to and beyond are, last align. strategies their get or have as in planning in where that they we're have the volume are through how encouraged relative by improve chain. intermodal for

customer So first helpful. goals community I and there, foremost, is very receptive think,

toughest disfavored position in over the at a it most when a the we Secondly, through go that's market in we're our market, to cost market, to purchase the costs of cycle we're time while our the cycle. the relates -- decelerating adjust transportation portion when Intermodal of as decelerating part within

on stable help And cost so us margins. price a will improving getting and a to price basis therefore, help an and

a year Mexico, CPCK place having of I to high-performing our X, working terrific great the of the arrow having to X see think, improvement taken some ] work now business. shoot together, us the into that's another intermodal already that's under a out with already with addition the great and which poised, So and in basket CSX our intermodal [ already our relationship those in gives combination and Tom, belt to

is California goes network. state January. of AF, the ABX that the trade owner operators dray what in like or specifically Number in new look as other that of well believe that down a And the been I because owner state XXXX. we by during there's add than time pool I parties third-party couple just or that limiting California, more effect was that lifted correction driven cycle, are one, meaning containers third rail would during capacity, rely companies the factor. this XXXX, XXXX-XXXX it's the against ability as And regulations, the all period injunction by It specifically capacity removing correction any on the dray of -- on this more than operators I in largely in in into implemented. intermodal saw say that

the diesel December All year. registry be registry, a So really truck that to this to the be will added on have that to last XX of is emission vehicles cap X that. putting can vehicles dray added new

be advantage And to we've both up purchased, affect electric And of so -- to take what of X-megawatt in that of the advantage able use be vehicles we've we as to that charging California. as vehicles done infrastructure to electric that starts in market that of is the almost able take the to charging that. well opportunity infrastructure when Southern state the operators we don't course, correct built we're XX to California owner

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

guess I Okay. dedicated. on one first is

growth. the into dedicated leaning market for You're

there. You're alone not

putting your much are from are part priced business perspective? the thing. cycle contracts entering appropriately How that I a how pricing a sort of Some given same down to doing peers multiyear there the are guess you not safeguards into ensuring that issue you of that and you're is the an have we're competitive to sure road? make going around of more being

issues for don't deals. and having We the is the Dedicated multiyear Thanks, question business all Jack, I the think these good are pricing morning. asked you anticipate reasons in

very high how you of how you protections conditions. market how type upon integrated customer very business level include configuration or and specialty providing based the over to or a and price You're the escalators within you, the time, requires with that of either contract very, equipment other business have service

play to where you space way of for That's just the are in to to the in X all as cycle. approach based our both looking parties. not long-term Jack. masquerading benefits those so that's We're upon very And that, point dedicated

relates the we business. we within expect that disciplines as have cycle in to quite business continue to strong been it the approach our performance of -- be. it this that, to and very has to the And so And will strong, the through

the Okay, the segment back second I think, per but over was your rail quarter that Mark. the side it And when costs are for Tom's you X% But And I kind on at guess maybe it shipment some was revenue progression to up sequentially. to look like if dynamics cost, felt but any -- down up dynamics of affecting the there. and your is Can were us your shipment, of cost going question Intermodal down. maybe was per of walk is shifting going of through the little to there -- third of within a dray, Intermodal, a moment, quarter? gears the cost kind going in that revenue quarter impact kind unusual were I sequentially X%, there

have the We to a dynamics. purchase higher because think opening empty cycle where side, are based Southern that I of Mexico. in markets over the service haul when balance market California that not is in comments, can that. mentioned a we'd do we as just actions of really it particularly just head into our transportation in of the that balance from costs taken a I adjust the Jack, we and and the some of revolves upon On have couple effect we the around time, and where cost network to think we But secondly, repositioning dynamics did it standpoint, network be completely my like

the I in that's most the think as so exactly quarter. where that's are I mentioned, cycle, of And we difficult here part and in market, declining third a the

believe it get from So better here. I us for does

ISI. Chappell from of Your the question comes Jon next Evercore with line

tie I guide, wanted could. up if I on to the

what fuel, consider lot of a cost, issues equipment onetime on in I of some lower out gain XQ. the other pointed would You of sales, kind

assumes few basically fourth You similar, quarter. maybe pretty a up pennies a guide

prepared of get or in to in So type offsetting is trying is at strictly sale deterioration the business in tractor substantially the is, remarks. what margins there of this the across improvement gain XQ, be the pricing that to going main the Or of any some lower on growth is or any I'm you continued mentioned equipment dedicated that core lines?

let anybody Yes. else Good chime some throw Thank you. question. in. and I'll perspective then

quarter, outside seasonal through we we e-commerce don't the As as get the at a of of the end lot we November. supply the look chain expect of as perhaps of driven lift part

the to think cautious upon We of little what will quarter. also at typical, be us December. we're certainly, looked in back key current I believe what the we a that's could the expect fairly in like. look And really for based we least we month of November think, We look run October, that half, out particularly as rate the towards December,

influence. But expect through mentioned, don't erosion, of a so we what level we forward. be pretty think, further you here And from gain an going going that's to expect predominantly any described, pricing and the Steve we're reset, much And as bit on little that sale we're we only sequentially. building and don't the

my And follow-up, then where just you as off. left

very XQlooks pricing similar in X start about a to beginning mean, pricing XXXX, in bottoming that 'XX of to potentially all think we of pricing the different I more at As of giving and lines. the minimum we guidance even all in back is quarter level half the without across any should business metrics obviously, or in think about reset see of you spot contractual the first business talking a before lines We're conceptually, different lot weaker. the of kind XQ seasonally, of very

this Steve. Yes, is

here I year what there sluggish sitting And think a XXXX to year. comments, can transition. a probably earlier in would suggested today, of we we from see that being be our the think start I

and opportunities know, different across you business. improvements see targeted pricing some to begin find book our never switch some to But arena. of we December signs to also of of mentioned that a we shifting You happens once January in something are yourself from things seeing and often

I see those. And -- don't snapping back. it And instantly pursue so just we'll continue but to

to that be do an the first begins So probably quarter. exit that begin think of believe itself but will we we that I bit the more XXXX ramp same, upward first quarter as a there's of

with comes of Your Ossenbeck next from JPMorgan. line Brian the question

a see sense the they I ask give least that they're lot could There's within about growth competition next treating as fill one rail, network? of intermodal. this price more of time a you're you up there. And more I might Western how then we as bit going to to which your stacked been if of boxes said not year, on wanted before. within wanted main us look at at pushing maybe as to implies volume hard the that little competitors have a towards on they

just us intermodal the see and I if looks if around sense to you terms different how any a wonder can put competition it's give by in quarters that together and of of

the But say between Yes, we somewhere to I terms I'd probably X million X out that XX% within your shipments. of still there's was stack. that is here in the opportunity market question, look Intermodal and industries stacks, on XX% think level, shipments million when based on that's level X.X that to over-the-road were and about that intermodal. from would get back to to saying back million -- and to I'm getting we if And XXXX that over XXXX of road between term mix convert

opportunities a is. we we're and over there's more seeing there. another have that's coming over competitor focus from, find are between service, to starting customers and an take why the #X starting example trend. It is far more say would just that emerging to of That's level been on are shipments other the road now is also provider. a willing intermodal see we industry, And The historically our growth. of that for great that intermodal, is Mexico I where this markets where And some We're opening that X That's different up. in that decisions very make are low. mix that has it's based opportunities the And intermodal to not where really advantage to road. in potentially million are and sustainability.

apple about for itself specific on the volume, least have environment. can it on thoughts competition commentary you a intermodal a confidence conversions the on is on with do space long the of as time Mark, looks partner and like willing some any on to some at still bite add is level take just short longer on everybody if shippers of to for then -- we're versus willing the boxes being. And rates within another maybe at lower maybe, pricing you And these

Yes.

here haul the is that alternative. with been As particularly some even more choice competitor closer the markets, forth. competition Jim been market mentioned, there's unusual and #X look truck, particularly as is which shipper no sophisticated pretty that, a convert that's which portion emissions those better as discussions in to to their to and at had, there's Jim over-the-road of achieve including is with at over-the-road with that the immediate to place total head tree, But looking back customer there's and increasingly and really And decision large, so mentioned, the we've term from the more short reduction the the generally we than of go conversion standpoint intermodal.

that now healthy emission there's can shipper, and over the savings have so a that and you you the between And bring obviously, fuel still, economic intermodal gap to value can have the piece. road

and And that. that's raised XXXX, achieve we why them it's help on planning so customers intend for prominence and our again, to I think

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

difficult for you well. you side how second, in capacity why that a do have bit already do see think evolves the now. the resilient XQ quarter remains you the you've a are much And of bankruptcies mom-and-pop so been and thought A, that you saying exit that marketplace. yet little obviously, high-profile quite to coming the seeing resilient some as peers. kind but So exits, seen and Obviously, they was you pretty in you And aren't of all and you more think quarters? right really far? that And starting your than were supply in

to were acquire Yes, the could your to suggest highly unusual able I that's that of Ravi, But and period. buildup the would been stubbornly pandemic to during that that look question. any think to people retain it's at resilient just done part visibility at assessment be been of seeing has why like health is, think, owner-operator I turn-ins our which have lease the capacity been from that that overall look the mix. that, into of the we're least we of portion because on things increase, exhausted, portfolio,

again, So -- to those lagging. opposed are indicators things as more those leading

brokerage us I this that we've of bankruptcies we us of any some giving customers as are to think we brokerage the more longer maybe after best the the high-profile But the industry. you that's to another interest probably so XX one more And the that, that an has year consider expected would are it from point in moving outcome months that's reference from hasn't think, I something referenced brokerage, solution have to asset of in confidence but at taken their brokerage there. tooth on more What in is what long us, also play in last as that seen an that overreliance than would moving here. been sensing to of

And of so some and way of that a back we've to more customers, through move bigger because those the those asset a coming news. there is, much I recent signals seen within allocations most think, certainly in

of that kind a early follow-up, Or said maybe the you figure is I'm your in cycle. terms like XXXX. market now? you customers in kind just what back you're to given don't you're of is from that that That's you hearing is kind that in bid of moves something how And and bad seeing right of helpful. feel what out as early snap early trying

the of just piece much the of quarter just of and big fourth yet. into to We're of time not discussing other's kind very together actual planning more start each and planning and Ravi, We're goals Yes. discussion a is year events, in get into of ahead. kind phase that

data yet. got on And so that haven't for we you any real

they at we -- of feel they've and understanding are what's the that the season a that through goods and this give trepidation holiday some actions customers where of the as there. insight moving that taken, pretty And consumer are they say general amount actual period. about this all think comment and would least I'll I here, just the is inventories holiday is where move I what's inflation understand they But there's that into feel are perhaps good good

a be take that least But this we going don't issue may inventory consider obviously, into just would took at cautious. bit customer I in I more So think to XXXX. that we're overhang the

the to pick levels on a think on that I where we're get basis, entering are up. fairly light. you And sit, and to I'd in begin then at just least I made from February January historical earlier XXXX, things March, add And I typically volume Mark, to comments really that, once about

the past the over agree been that context we've where When there the was those for was and the more I than renewal things I to of So conversations, next forward I side that equation upbeat referring with it I customer of if -- those to. broader year. and of types going we about absolutely separate so actually X those feel tone enter comes as

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

suggest get the still talking you're data of And rate spread your guess, there's some truckload? wide maybe it Do in of would context to I'm data? going intermodal?? -- industry just we're a in that rate. that, that wondering Or So in are confident we a more it? it confident can I in pretty within the and like get Are contract you recovery. between that is spot price that then 'XX? And see you you about Is in where lot

the and with contract open as is spot -- that weigh I'll business capacity, fourth influential just of particularly opportunities let more and our certainly between maybe we that's in. in here I'll network Jim it's there in preserve for add more than actually our Yes, still of looking quarter. and kind our So arrived rates,

overall impacting seen And of seeing we've so it also because stabilize. the the we're per that in but And our gap. revenue gap, that's network truck

for getting It's XX better any weeks, X yes. stabilized probably -- but any Jim, any now necessarily it to or worse, not

a that's to now. market the capacity taking price avoid that compensable or right freight. portfolio reallocate And I have that, have stabilization book, our you think a have to you more we're book, and on can and we network to a discussions part this either move to of that an particularly to improve improvement. even effort opportunity than before arrived having trucks, our think with that have the And all-hands-on-deck process our have location. of that's the that this we and is I And we presently and know have start So more parts action we within certain Scott, other at

it's and Yes. activity a or see they you the would gotten at to similar seen locked that the very they just the through we actually you the data often that, down causing recent there before that where have to rates flurry in that for We're the being shippers. find have you the the things a internal contract looking historically, could weeks And cycle of information And the out what of bottoms is contract no bankruptcy way market spot like longer our when same say are, not are about And spreads whatever Scott. available. our is, rate XX%. that at go is recovery all come rates and months rather, the

how risky this for that available look So than rate can or opportunities might for rather opportunity contract available cycle, you into price. be the shippers lock get start not longer into that to that's taking you a capacity at I of durable that with

I change, to that's targeted that's opportunities starts what So the reside. and where believe

about year what And it you're CapEx you high separately, that the in the earnings and filling strikes PACCARs of end just year. you've quickly. alone has and lot of dynamic up -- up you're then earnings I next CapEx me is for got down coming don't been thought. at us the throughout down slots Okay. and And think talking telling guidance a

And so a on. -- weird it's dynamic it's going just

puzzling about why CAPEX think on happening? perspective -- any sort next this for environment. year? is of And Just it you How it's a just

this think into Just how 'XX. plays you out curious

going able for would I side dealing couple say, what not to were we the environment have carriers market say were to here us the over back the we're equipment otherwise think with gotten and OEMs all XXXX I is, in, of like was of the the XXXX. past just years of again, get that

working bit fleet So targeted XXXX. profile. age of of catch-up CapEx in our we toward there And are a as is

part cash not flows capital. is It's the that how and to dynamic. we're deploying of So that we are our tone deaf

up Scott, a think other best to contributor have of we And most we that secondary acquisitions appropriate. we're a couple the our -- and picked getting is dedicated and that place we've Yes. the there, is that growth probably

Schneider And well. so as we have there event specific a

catch-up So trucks. -- from -- The we're fleet. but getting have we're inflationary ones some out on today the the predominance and ones just certainly more those impacts that buying that of a is cost the than

on thoughts for early CapEx 'XX? Any

next level number Andre than to I We're XXXX. be expect guidance would the the working on nailing that the on those will of net lower numbers. provide call.

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

just I in there luck you to stops the through position. good thoughts know, Scott's I Darrell Steve, your well and has X.X on contract. want in got on new career, to dig the to guess below had multiple congrats

something adjust? below and don't that well negative come that now gap. Or least still is record the understand, those have record contract that spot your changes think would And but all you do to continue just So given know to want I if pricing be see contract spot, the way contract, still gap? I you outlook you close down at contracts

Yes.

of raise from like. pricing business. as it's think out there to we target well as we're higher we that would floor in the be to have than that be I now, contract on Right our mix really opportunities here that spot at for will able what

spot to And than contract. opportunities remains see so exposure our while it I'd reduce to lower

of And we renewals. said earlier, basically through our business of book

no at BiTEs apple there's the been left. the have Apple so taken And and

close that add-on, that Yes. to into asked because it just here. is to spot like you long-term right? spot reason continue. So box then level Intermodal, would And thoughts of up. -- if that you your The this just your that adds through meet down to weakness I the No, that mentioned you're be sounded your answer season, continue on Steve. versus contracts could I expected coming goes I gap bid that weakness But on also get follow-up appreciate would

you a Obviously, up bit. took CapEx

I the margin about You we were of to improved, and that before turns side don't like your worse 'XX. Any but intermodal actually going dedicated incremental equation quarter the just cost the on on of see talked too? margins since focus. what's details public, you've first looks that posted thoughts back you the It were the guess,

Yes.

also on as it the to So how better number is of we're currently talked about network. costs the this leverage through we our as cycle. be able to start turn tide relates that network PT price. X that our adjust to to obviously, There's there's out the there. to balance higher to within dynamics repositioning -- market opportunities still play And experiencing have obviously, we're operating need the Mark

adding to at have of Ken, any just chassis could So opportunity suggest also, and without volume capability. just it's XX% we container least and incremental pent-up drive cost

excuse again, at juncture we, wouldn't think we as also containers least so year, me, chassis. and that anticipate, capital And into capacity we'll at next this be early through adding or

do a You might the as tractor volumes side return. bit us see little on

And and to leverage, so that we there's mentioned. that invest to as don't a lot Jim of get achieve looking there to have self-help in to

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

in talked retirement. I best operator. about. you, to on you bit Steve, the business CPKC luck And of Thank that a wanted drill down little

You XX%. grew said it

how how business? of core opportunity these importantly in existing compare more margins questions. of big going is sort how to couple a do big, the is and One, the And early So margins the this forward?

Yes.

to down break is really opportunity don't it within but geographies, we're we the So -- us the great for to grow. able margins a be

currently there's the opportunities of road points over freight. difference in there's over And a and between between So freight percentage say few road. other that intermodal versus penetration that's Mexico currently, similar of running we'd long-haul the

shoring. overall growth in a And the book, overall, of as higher is our well as small by of increase much market it's the very Mexico, driven percent part near but

is we'd still larger. say incremental relatively but opportunity the is volume that small, So longer-term

established service new of is in that meaningful always product a of is now time of the reliability. there. importantly, as just that share because so it sustaining transit some difficulty most made over ebbs it deliver that, more the with as deeper, just but service We've a and sector, couple had Jason, markets reliable for which starts relates been acquisitions that up us -- ability has the truck-like automotive-centric. the growing opens to some well. as is we of to consistent we've intermodal and out relationships more Mexico we've automotive difficulty gone through service And

combination, of because -- to so the it's has but of that, also all a lot of experience changing change have This I prior being certainly do think, of perceptions we consistent. not

of after efforts so in that timing customers, a of didn't very, this. the get active with of are season very we because series chance much front of we've a and getting lot the with jointly months that to several because do And our been the as of last a of allocation that all

have well benefit when service getting And in the and better of some front now can get opportunity. the truck-like doesn't much is now emissions some a it of so -- proof for and than and you season great allocation a what as as experience deliver points that. we benefit also cost also benefit,

equipment? You of growing business double-digit some rest upfront a of obviously lot the guys are clip, under the least a you and reposition is at pressure. cost this to at experiencing Are

North Southern because we're rate It's on X consider the Coast West as particularly there. head higher as Bound and based on current markets the percent we particularly say costs as headhaul repositioning, empty seeing markets, would X upon primary well. the structures of the I pump priming Cal a markets, would we we're Mexico that haul

actions that it's think the limit we've with bit going but forward. So with that the in more short can a gotten, punitive and term, again, we I balance

of moves Steve, in one have coming should to ads that follow-up on given the direction so retire, that talked have expect to before side, I you And the you see box is Okay. directional that about down here, terms container in my capacity, of pent-up likely you 'XX. one you the we down give much for

Yes, years operations. have there, of very XXXX, either over would intermodal in anticipate for position whereas ourselves for investments our any, if in can leverage container needs particularly did or insight good that's that we've to CapEx CapEx Jason, We made the chassis we the there. past in in we some XXXX couple little, and business chassis. a

M&M So to Mark's that part we assessment have fold of acquisition of it just point, an new the in things. with But be overall earlier transport. will a and

comes CapEx the fleet. And that amount of of so some incremental just be there size from will the increased

Your line next comes the of from Chris Citigroup. Wetherbee question with

pockets there potentially maybe said freight better were market move depending was. environment around the had you some mentioned what some Mark, that you assets of on priced

as Just types assets there and think potentially capture think want sort putting of out you out Is of other might of taking network you that like? look is dedicated? there here? could curious what in them that business Or about that

if capital for in thanks be looking and our as comment the And Chris, the place intra opportunistic we'll network dedicated, a than But we was and and secondary the well question. within get decision. the itself that be return we there my Yes, was current more network, and to even but growth anticipated my environment. put could opportunities within more for primary best a comment

around But follow-up -- to okay, that's of maybe helpful. size. leads sort -- that I appreciate network guess a question I that.

to it, side from think continue XXXX, think build obviously, and of fleet done you network should that. guys do have the as to the mix look you maybe versus like size dedicated dedicated perspective. look on out into about acquisitions As work a you you

of we or where thinking thinking dedicated. see that our it changed and Yes. our long bounds acquisitively, we Chris, organically don't We've really we're upward after hits growth of profile either as our stopped our have contract on what dedicated profile over durable is -- of hits return that or time, as for returns

having believe as makes that for offering. benefit the in do water we we offering over standpoint, That said, from us. sense or that healthy from ores So a would one-way be and time we a being network growing

more that owner looking we against and to third over capacity other trailer-centric think we're though, see capacity, company how only. could optimize And time. operator parties best increasingly, I our being around power we

definition customers our it. the They orange trailer I And see in in network, but our there truck business, the network, look you before, that and optimize our via and resides we definition we described and that's capacity trailer as other pool in out mentioned of type. how only what one brokerage then at really gets count see our our power about is so the supported

is larger business component. network that of our only because power so view And from a customer

to put Obviously, But we quarters part difficult appropriate not So quite very our with we a we ago, we're to right we that into where were return. of couple necessarily as long of we're cycle looking assets the wasn't can get there. now. happy long shrink a as it the that were ago, too in

So where at. we the price it's get and fundamentals keep get term after terrific that would the just relative long got to to to and those over getting back recovery, the it market about be

Bascome Your comes Susquehanna. next with question from Majors

Is and there back like order you surprise pretty Even ago us rank the what negative It kind of about and pretty out in bid charges to Just negative to what any would X happened you outlook happened to went certainly months then kind season if to of touch were clarifications the expected knew X you you where in you uniquely seasonality. significant were as quarter. a with better items, quick of called was today? you your to biggest on trying just a how earlier, so you what that that the -- $X.XX considering way add in what surprise feels the knowing gave when was understand in August. the that or outside little $X.XX unexpected.

attrition after projecting we capacity think having when in that the were the and we place business question. particularly see I return more take we to not But to what seasonality certainly the is I it marketplace. Yes. expected a -- to understand of relative bit the expect in

bit had -- in more have might the would of I XX% our we our quarter. business, originally fourth of XX% backwards. as of expect versus truck So in business, that. than think in quarter of intermodal now negotiations got price we somebody that's that part continuing seasonality some the think unfortunately and renewed book, our vice final in I the about lack the into the even renewed third book a book our

order renewals. But the the of of that's magnitude

their And that how quite third had so upon the of element are you they're doing. tendering out initially planned then mix what And the as And -- business is do customers as favorable realization as what's of of we and weren't based your those those occurred. realize that that?

market something But our are generally are and where And pretty this project well. more customers include uncertainty on more has that's a try as to so good of we and at. variability to series also factors

trajectory but Thank which to first there's kind you of in ton run to year, ways sense. into else first a that for that guiding not But year of other go back rate clear hold Or next change there just seasonality quarter, in half of the the as before, lot versus that of improve dollar-ish the about now, -- pretty And year? where price you're half? we hit deeper second seasonal versus in this may historically anything opportunity get the it. that really opportunities the of been on in I lever you've clarity. From to we want that that besides the are makes to back half looked not meaningful you've this a the

we where think, is it higher look opportunity which and the into think, the most which having real can doing do to dedicated the only And versus have to the to business, the great momentum, where are results. half our and offering, of I I positive most opportunity we first in half. XXXX, but real and articulated that a was at then for always leading question beyond. the We've, what network as improvement are Seasonality having is think, I'd And stand intermodal continue improve one we're we I opportunity. a continuing as well, be is mix adder I second not on XXXX. guess a question the think we're to that's I grow

high-performing go some for and approve in But relationships drivers and puts longer CPKC and our positioning which the a with than a that believe got place are through X customer XX we stage think, intermodal better momentum UP. in and strategic with an uncertainty UP us performance people with we we're the minds we now now new in as of do into I are to It what where key accomplish no the we've felt. our and going trying full is I good allocation growth the We're in the just, our us, CSX.

we well some I think really there as but performed some XXXX. those changes was into we made operationally, coming of uncertainty

the Chan Stifel. question comes next Bruce And from at

brokerage bit dig Just a into little more.

shipment broadly are peers some on maybe have all a pricing if little driven of out power it's there side? may with been difference more if the reporting, the just of or in disciplined a saw being them You growth. reporting than bit some it's actually volume that have business of to you Any do pressure something on or only thoughts the more few experience what mix

Yes.

we our think critiqued might being on and revenue get there there. disciplined targets I order our of very per net

our I data carrier this think and to our shipper take insights, are weren't losses looking the on environment. good, the and costs very and in and risk both pricing we

trade, on trade so we were as on if were And trade to we Bruce, going margin. opposed to volume to going

side. the That here follow-up on makes then just sense. Okay. a And dedicated

opening You talked your and there the some remarks. about of pipeline in visibility the opportunities

you And pipeline visibility maybe Some you of gives the seeing some weaker confidence Are of same conversion? kind your peers thing? have in talked what there? your about

it's closed first And playing what momentum. we've quarter that we share -- And but really have, our pipeline our lot quite results. few quarter yet, pipeline plays of because our juncture, and seeing to our get growth there, picked will have a some We taking other and Bruce, and this we're and second at up additional customers might a visibility in more with after organically momentum gives our just quarter, you them we fourth out believe and don't specialty they're that's when some and in us also we've obviously, well start-ups. We that good start-ups customers, we playbook some to to but got current growth the continue. acquisitions third a in look decision-making -- have some elongated good be that introducing at are doing

call no Rourke. questions. will Mark time, I are the back other At there over And to this hand

to Thank I by attention you, close, this your to morning. XX our just if to terrific. presentation. time going I'm Page Well, investor of and XX could, everyone, for referring you updated

to success, we've talked dedicated through continue this organically growth and acquisition. be by both As recent our on we enthused our call,

we to great the and both those our credit long-standing it the to in really movements. us acquisition network opportunities strong, and a our The a are our the We and really year CSX. over-the-road both we And enter performance allocation next operations and best-in-class shop and we to with partners addition the alignment and driver X season, ahead running position provider team believe with our of we those at CPKC synergies favorably to and just very believe with expectations, take months substantive the now convert the companies. advantage the have UP have under relationships is belt of over there of are rail

our driver ways And strong our options. also opportunity to in our network resources, optimize operator then our truck improvement to We're price capacity commitments the through dividend better response by pursuit in purchases optionality strategic contract us company including largest addressing and priorities finally, at and spot owner shareholder third-party advance give previously business the towards announced by we opportunities balance $XXX looking targeted core power-only and market a business through combine and buyback sheet of additional our and that providing services reinvesting program. but returns our continued enhance attractive does to acquisitive yields in our also million how share

So thank forward you, look follow-ups. and to our

concludes conference call. today's This

may You disconnect. now