Werner Enterprises (WERN) 30 Jul 242024 Q2 Earnings call transcript

Good afternoon and welcome to the Werner Enterprises Second Quarter 2024 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions]. After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. like Vice the Strategic President now Chris over Planning. would Senior Neil, of I to conference turn to Pricing and Please go ahead.

the market turn A slide and with disclosure werner.com. and release President well and provide forward-looking our the Chairman to are the for available today. which available and and outlook. of Derek Earlier on our remarks our detail help in Vice me information additional may Chris the today's as update will investor earnings financial now and Treasurer The with everyone. of attached be actual earnings cover we in our for in will statement update differ The to results is release the and more our facilitate other appendix and website performance. is to and measures comparable CEO Please contain will Executive investors call overview our being that Derek. our of on results the for release Leathers in priorities the X the the year. I'll and disclaimers past cause are materially. call, QX and at release CFO. provide an presentation company XXXX presentation, our tables included results in as afternoon, an strategic over guidance and statements our later results. webcast comparison that present directly second GAAP see for supplemental believe uncertainties related Derek Chris most Good the reconciliation Wikoff, a presentation. On statements. Today's slide of on of involve the measures to replay reports we section provides the could to quarter Today's today, non-GAAP factors results earnings to risks, forward-looking issued recorded using

summer structurally we afternoon, to excellence so appreciate everyone. today. with a operating challenging, commitment Hope business joining while far. the us an Chris, you're nice Despite long-term are we you improving having customer driving remains and growth. Thank good delivering you, a And that environment

Our signs encouraged freight thanks progressing professionalism QX but times and the in of don't industry and market we early towards by sequentially earnings tough wide and people are that equilibrium. persist, resilience is headwinds truck to improve we Tough while over last, the members quarter. Mexico fifth One-Way XX,XXX their that the retention. continued the continue on I'm for growing. production talented and focus volume maintain controlling consecutive controllables. pleased high to and to was increased up revenue per customer is team Dedicated do report

returned logistics first income to Our challenging after segment quarter. a operating positive

cash increasing to operating structural We execute $XX to generated identify to estimated solid and purchased XXXX shares cost the more than savings reduce and our We X.X million and we million. operating continue changes over are during in-year flow quarter.

freight on safety, actively generate capture to to market executing focus the value strategy market excellence linger, continue long term are position our We strengthen Overall innovation. improves. operating leverage service, a operational challenges we and to and Werner as but with on

Let's our X results. slide move to QX and highlight

margin prolonged at fleet for discipline combined lower operating TTFs environment end Despite our versus and X.X% of lower fuel margin Adjusted was quarter, dedicated of net as margin quarter. operating revenues size surcharges. the X% Adjusted resiliency resulted durability, longer During backdrop was dedicated overall year. the the $X.XX. in freight was adjusted were the and X% an demonstrated the with EPS prior a and pricing

week, week. sideline of check, and and that compliance and to is Spot as regulatory of truckload pipeline which remains the tender was inspection early the during initiative most truckers you improved in stable is reflecting favorable logistics gross nearly to opportunities during following the for operational truck three increased quality the rejects dedicated led due during in However, demand equilibrium. then to margin to a per in quarter, known the focus Internal excellence and revenue improvement rates to know, sequential strong. One-Way per closer increased production tightened the road trend. quarters. vehicle -- revenue and week contributed some market that the last X% a have One-Way on a and environment the highest technology tools in

downturn. unprecedented continue with increasing rates dedicated remain reporting volumes and we our renewals Intermodal One-Way quarter while modest a anticipate gains the are year-over-year. In short, contract on sale in fleet. freight the as and equipment. sequential negotiated pleased and longer call are volumes previously Pressure need a straight more improvement strong, reflect inflection volume see Truckload from only forward. smaller on can used evidence growth market, That Logistics effective an were in of signs positive of to six second In to we results before the period said, become Challenges increased we encouraged over and a Power sequentially. moving over sequential we quarters improvement of improving lower addition, XX% definitive

slide to Moving X.

implementing improves. to push Werner that for forward with will success structural position We improvements continue as rate

recently continues drive driving decisions to representing excellence generate creation long communicated driving competency over driving three priority. first operational in drive our framework growth is earnings inform the core term, Relative efficiency. values, beyond. results, XXXX are associates the durability, value and in core to commitment They our and capital a and Our environment. business, overarching our our innovation, power to to and We priorities

at Mexico of period. the portfolio quarter. on fifth increased volumes for represented focused position quarter. consecutive compared us our changes per flex. Dedicated the the controlling controllables to that teens fleet implementing to low and the miles truck in increased year of One-Way are We end leverage trucks maximize and the prior the XX% market

term in long target our Northeast the received Our in several range. ability in One-Way our We segment quarter. service the remain gap offering that results business to gain strength or new the recent awards ECM confident from bridge to

professional priority excellence as we're operational pace evolved progress our in remains a Although timing to second Measurable training competency. driving on programs safety drivers, core made to our difficult has newer been and equipment. quality predict, and in progress of due investment making performance good

to realize a from investment. starting our technology benefit are new of pace We

will Our planned. This as has results. revenue progressing platform, our to is Truckload migrated a synergies Logistics a we reduce our our of is as TMS capability, now opportunities and One-Way The as be the and EDGE by and additional the value platform single freight grow business of to and costs. multi-year encouraged and customers intermodal business operational both provide experience to transition our journey well enhance continue and

third million. had another We savings quarter capital capital. our And continue from Our efficiency. expand, of priority to initiatives driving trends over cost growing cash favorable flow strong working operating in $XX finally, ongoing

repurchases of million fleet We continue in our with spend and allocation, during including CapEx quarter. remains the capital intentionality low. age $XX share

We priorities. will continue to against progress you update these on our

X, our the of to discuss Turning view market. current slide to

call gains improved too remains environment rates experienced conditions have inflection, quarter encouraged it by which signs week, through midway and steady demand to improving led early competitive. Freight One-Way While check continued an in held. are freight tightening. tighter spot during those a to of into been We and the load particular we but has July.

seasonality, experienced demand last on to more of QX with related While our and we the indices quarter, freight West better half underperformed the by certain spot rates tools, seasonal trends broader enabled spot execution the freight during maintained One-Way we recognize Coast higher projects. strong segment selection

typical to expect customers fall. leading season seasonality relative peak We up with the Recent levels. are in to conversations encouraging inventory

Moving X. to slide

moment operations take more of Before a together I have results our over with QX to many recognize marked Chris whom July Mexico, anniversary colleagues. in relationships in to turning want our detail, the it partners, to decades. of to our carrier our Mexico multiple discuss we spanning XXth

a portfolio crossing scale of location border. services premium have operation our Mexico and We across over every broad built with southern a large nearly

our degree product and facility property terminal that have have our including over We providing high half team Guadalajara, a Mexico Querétaro. our in transload with of dry integrity for includes management manage first in class of Laredo refrigerated they boundaries, XXX and City, located numerous security. Several workforce Mexico of and them with Monterrey a members in offices journey, a been all us of Mexico, throughout associates, and within over of nearly

support carriers. and customer companies over service Chris. we the We customers expansive We our of were and with and to assist now At many growth. I our expertise, recently cross-border Omaha, would footprint look approach. years without associates, cross-border relevant we experience, here this honored to including forward of excellent are transportation in and expand not annual Mexico regulatory XX they our with customers Mexico of forum specific to many turn it as years to customer more into achievement our uniquely of based transportation their most positioned one will be celebrate reliable many, and partner largest

you, Thank Derek.

Let's XX. continue on slide

million Second X.X%, income XXX X% Adjusted and of used Adjusted $X.XX, gains One-Way prior pressure and margin primarily adjusted basis quarter $X.XX and market with combined softer a EPS in was operating equipment XX% rate year. a versus million, $XX.X and declined totaled revenues operating decrease by points. $XXX driven lower lower of was logistics.

total $XXX XX, versus second of income prior the XX% down $XXX year. for adjusted $XX.X X% to million. fell fuel was slide operating operating Turning Services TTS Truckload produce in revenue million, was On fleet X%. to Transportation points. the decrease in lower of net quarter our decline income. surcharges loaded Revenues by selling gains net Adjusted of to equipment sales XX% X%, a gains margin was of A low equipment. basis over XXX technology decline mileage continues fuel drove TTS operating million,

and a year. $X.X on last During down consolidated the sale gains quarter or million, was million, decline compared $X.X of of over to XX% equipment property

steady fleet per the One-Way year-over-year improvement TTS by and a and modestly than year, and fuel prior of equipment intentional to costs, X% quarter earlier were expenses reflected of as weaker to commitment mile the and the half Our freight fourth equipment in year but TTS per view revenue surcharges half been has prior total and X% long or operating million quarter values range during Through decline wages decreased rate remains down moderated margin of no versus X%. mile key $X focused lower maintenance term first smaller control declining per trailing and lingered. Net rate X% environment prior expense sequentially, more our XX-month for rate than size. in pushed second Trucking gains categories the operating has and year-over-year. was versus producing X.X% has offset higher digit X%, generating margins. XX% total equipment the supplies priority down operating basis. mile benefits Achieving dedicated TTS versus improvement margins remain dropped quarter. Insurance $X on TTS and gains Despite a durable, is Operating year. Several down year. and expense a we and was double showed and operating on million salaries, our non-driver expense million $X or was claims

confidence have from long-term that our to While continue in One-Way. will recent bridge to rate four results key time in include the levers first to These it range. gap remains challenging forecast, we over improvement our target

and we Second, at incremental contribution dedicated higher normalized to growth return volume. a margin existing as fleets for

Third, market. normalization improvements coupled through equipment cost with in tech And fourth, enabled initiative synergies. the saving structural used our

truck dedicated to average of per during fleet was week X%. our of second second revenue of trucks for by year-over-year, quarter discipline end, Let's during fuel result quarter week compared represented is metrics. truck the Dedicated of and XX the of XX% quarter, revenue to We its down turn sequentially quarter. the quarter XX last X% quarters, ago. review million, impact slightly fuel XX% slide fleet TTS ended as $XXX trucks. X% XX increased revenue to our fleet. Dedicated quarters. from growing net losses XX last drove Within the the increase segment X% a per of fewer At at X,XXX The TTS of maintaining the TTS year-over-year per represented down declined the TTS X,XXX increased a the XX% truck the TTS per X% per certain net well. quarter. to trucks and our pricing year-over-year. with production dedicated average to Dedicated decreased revenue trucks year trending fleet XX while end of

are scale, model. who continue safety to proven, will dedicated the and and exhibit customers service our discipline for looking of reliability value We

that count lower further recent we season in re-investable Trucking And widespread, revenue will yet truck truck verticals more improved decrease Revenue not recognize to of X,XXX also demand One-Way million, X% freight a was to business per versus of bid Average to year. to trucks. week fuel quarter. prior well of some the quarter. contract effective earlier second $XXX new opportunities improvement up but for bids, market hard declined fleets is penetrate are and complete. with year-over-year. serve Although at an X% results events other We One-Way net XX% the during rates our mostly started our have seen within was margins. per become and improving existing experience we good positioned from

freight of the XXXX. half, transitioning proactive our expected with be and one However, higher rates in we choices to better the end portfolio in way second will year the and into throughout methodical

and utility trucks. prior expected, X% fewer year production realized gains Regarding quarter another miles production just versus less total as of we've with XX% achieving

favorable We to although improvements expect continue, trend year-over-year moderate. will the

our addition, offering segment In grow. Power logistics Only to within continues

volume the provides our One-Way growth showing for overall asset and One-Way unique alternatives. One-Way of more Truckload customers. freight rates, strong tighter up combination gains Miles asset production optionality and combined offering, translates are in with Our and a Only year-over-year, plus miles including ROI improved growth market our for Power This in only better to light X% with power is

Turning in logistics revenue X% revenues. second Revenues sequentially. In customer $XXX grew representing sequentially from year-over-year, to the Logistics volumes second as logistics but existing steady. generally quarter of the were XX% volumes decreased slide our on million, total quarter, base board segment the X%. X% increased business on were X% and and was XX% new came now during Truckload XX. Shipments quarter declined down from Revenue shipments

Truckload by shipment. solution of quarter. Intermodal partially to As revenue revenues revenues, segment in per decrease Logistics XX% due Final X% previously in but represented up XX% more growing the Mile the which Only again portion XX% decreased increased Power increased XX% year-over-year approximately revenue, mentioned, our year-over-year. offset sequentially, a shipments, a of make volume

gross we income operating second margin of breakeven Adjusted the XXX and produced quarter. to Only just points logistics improvements and by X.X%, Mile compression, in sequentially gross environment, As the shipments, logistics later in continues to We basis year greater margins, enhancements. service our driven in quarter. Power increased can, was due competitive In operating was from infrastructure margin It due margins revenue meantime, which income operating integration expected, the brokerage, we but what our after operating million technology. is to and improve cost continue as industry leading technology and are including and continued we and be expect technology falling short brokerage margins expertise do modestly short-term. in savings XXX provide year-over-year, improving building and as controlling rate higher to to savings very a in points at first scale. well down the operating in the Adjusted Final $X.X basis improved cost quality pressuring to

have million, XX Moving have XXXX savings on from $XX our savings the line have savings of been to slide to and of $XX previously expanded an discuss million of communicated $XX of target already our cost rest over recognized clear excess million to we a program, the program. we sight

phase of the We are program currently on XXXX. next developing our for focused

million million equivalents. with total Operating in or quarter capital. as to flow continued quarter at strong ended $XX $XXX with remained Let's for slide We efficiency and of XX% second the in cash consistent cash review XX. revenue, year our very flow on cash we the prior working realize cash

As expected, to continues down. net CapEx trend

million, Second $XX XX% year-over-year. quarter was million $XX down or

average trucks a As fleet revenue of we continue the last maintain and than period years to averaging a date, CapEx year. low revenue year-to- is age X% below X to net for compared X.X percent at over same Yes, less XX% of years. on of trailers

up year-over-year. Total through and including free this total XXX X% a $XXX liquidity basis was availability million was the year end As of at first half result, cash our of on cash revolver. points million, $XX or quarter flow revenues,

and million our outstanding into matured capacity. a term absorbed was loan quarter, the revolver with $XX.X During

slide ended EBITDA EBITDA XX. the year was times a the or sequentially than or up past over a with change in quarter X% million year-over-year million up compression debt, X.X $XX to months. up $XX XX million $XXX by debt to We Moving earlier. Net XX% debt less basis, net driven and to was X%. margin On compared

debt very XX, no slide balance priorities recap We in capital and sheet, near-term related to structure. On our our relatively let's to capital, healthy maturities leverage have allocation. access a low strategic

the to being between returning prioritize reinvestment business to also funding term over in shareholders, continue M&A. We the balanced capital debt reducing while strategic and long

the first generated free $XX $XX and for we million dividends for the of $XX cash half repurchase. For share million utilized year, nearly flow, million

price during During the repurchase quarter, our share invested the an prior average share program, of million program. Board approved $XX.XX. a share new at X repurchases replacing million towards the We $XX quarter

have remaining million the We X.X shares board approved under program.

guidance. Let's and our review slide XX of continue on full-year XXXX a

fleet guidance Our X% down to remains X%. full-year down

net date. X% on We second the for price across focused in discipline remain growth down are maintaining year-to- but and our in potential margin see half, We dedicated portfolio.

between previously. we million net For $XXX and million from expect now XXXX, million $XXX down to $XXX $XXX CapEx million,

range trucks we As terminals investing lion's as truck and on and to per X%. always, year share within the the talent. Dedicated year trailing but quarter decreased total remain is our revenue year, guidance equipment, Truckload our guidance for remain X% in range. mile second grew focused within to the of revenue One-Way X% in over half expected in first full per and technology, X.X%

year-over-year the expect third in to down quarter be the X% We flat. to change

lower opportunity increasing half gains equipment rate going were in Equipment remain year. the see values to forward. $X.X million of for longer. first and We we As property the for favorable now changes anticipate

lowering As million range from previously. in a result, $XX $X our gains range the million down and to million, million $XX now of we expect are $XX to

was in items in XX.X%. quarter. first certain the rate reflecting discrete Year-to-date the one-time quarter tax second Our XX%, is

the We this to out level year. expect throughout

the trailer years fleet respectively, and the years I'll full-year age to between quarter turn at our it back from XX.X%. the XX.X% remains Derek. XXXX. range of unchanged to now guidance average X.X X.X end of end was truck second of Our and The

It Thank another stayed income controlling are and we you, course We and on proud for encouraged and low frequency. our by sequential higher the the but safety quarter our Chris. was operating focused controllables. record our industry, challenging preventable were accident of

actively and cash investing improved to providing by valued strategically of enhance miles strength which Miles, in advance in further We growing on ongoing marketplace customers. service steps logistics operations and our savings costs is We global are high One-Way level a focused the business, competitive to optimizing are in flow. remain near the We truck taking our to cost reducing continuing to per shore. our by made and to including we total We and One-Way and Mexico, despite supported progress on our Power we initiatives are Only secular trend profitability back grow pressures. and return

business. a our of the has As result never in evolution been stronger. Werner intentional

diversified We are a more better turn. to company positioned and market capitalize on

and tested our historical to market our questions. up are it We the demonstrate accelerates. With earnings open improves ability for cycle power demand let as and team us that, generate results

question-and-answer [Operator our this the assemble begin At Instructions] we will roster. We will now session. pause to momentarily time,

question The first from ahead. Morgan go Please Eric comes with Barclays.

Hey, peak to on leading you mentioned Thanks question. wanted good ask seasonality, normal I up for expecting guess, peak. season. afternoon. to taking I my Derek,

out also project around I think West called opportunities some you Coast. that have the materialized

if in well. wondering just I extending improvement, sequentially, modest into that on it. think maybe comment sequential So, and that's earnings bit from what or I XQ hearing appreciate as specifically interested in customers a guess comment I your and could XQ if expand more you you're on

the for Eric, question. thanks Sure,

prediction for season. to any So, I think to us on definitive trying kind be of peak early it's give

sure Right to about. return at seen to normal you as a like value period we've least project now, having, of We've our like the road was in pools of up theme to return opening talked it their being and stand value -- that brokerage relative picked inventory wanting in our asset demand being of slightly check, of the that to that for it needs over kind needs. having frankly, think the network as to their rates. relative We've we're thinking and prepared heard to for signs to favored enduring in you've start remarks, conversations back may making relates at be carriers and trailer indicating of seen of and based And like, the be sure capable being certain post reflect spot opportunities what they're what prepared the make where things what where road about that seasonality. as I overarching to we're able by discussions customer you business customers. look kind of from they're seen may stickiness kind check seem lots their just analyzing they up support perspective, to and an for more able

early that an kind externally data. I believe, feel me we're things to call to at leads are if certainly that not starting point still predicting of and normal inflection back it's to of on although the external All today look

the rates increased equilibrium Another balance rejection thing or point sort the all I of some point would of as of of those an trends, stickiness to late, type is of of kind which situation. to market

So yet it's that's balanced certainly previously. than tight, not one been one that's but more

rates really time we was seen saw something we that at the of ‘XX And rejection haven't kind mid-summer since level. last

by the results. and implemented. sequential season negotiated already that are we are reality bid to type part more been or far still that flat positive cycle phases the through early bid this rates even Those were countered of into are are reflective are conversations As recent the implementation now inheriting of as activity improvement modest come QX in is question, that

We'll those at you sequentially steer it's today's dynamic point QX. the in think in prudent So, because a do QX to put for clear the and of market. I still talk from think improvement to modest only QX mix two I we're of in purposes terms

to things X% you a Did the potentially business just if And one coming -- would on quick add a know, be could the as tractors or say you the count, X%. going that. on dedicated from for that to guidance potentially to clarification down few maybe tractor from where X% way you start Appreciate down improve? is

dedicated. to We're brokerage strong is competitive a between product, of price. really could bid add and and year-over-year seen year ways market which where our other this to on up ago. We've our going through and to step at by tractors great optionality Power was in The serve a be still we opportunities The up capabilities in with intermodal still our Yet customer One-Way desire One-Way. include still logistics significantly wouldn't is the even and we've it growth be Only pipeline we're number point a there. from It's focused disciplined right now. got

So terms modest dedicated growth, driven enter that's something true, by quality, in truck taking think that but and going of approach can a dedicated a improvement to high test to we're and about of pricing looking really is how we into agreement disciplined is us stand on making of the service. multi-year a sure for time whatever customer reflective

lot. a Appreciate Thanks Great. it.

Thank you.

is question with Bruce ahead. Please go next The Stifel. Chan from

gents. good Hey, afternoon,

Just saves. of around want cost comments follow-up the your to on some

you think $XX million. I of was north going that mentioned to up

here, how when much make to know, color or, are process of wondering decision dial some you sorts just in then, additional in so back? relative softness of that saves a up And of even of leverage offer those about can this watching guiding of do cost maybe maybe You year. to we just changes if the even involved are into, you more kind dial persistent little And, terms last incremental kind bit to think what maybe you more have? what

that thing the in structural vision and making that's and I we're making from macro sure way. to focused the term into right on efficiently cost that that short at with that to sure the team we're on focused enough making capabilities, our cutting the you've got we se, further or but are not specifics. that enhancing think players my can is we've end sure start I'll operational to very close a ready. we think want And acquisitions for the in sure the cutting we're that and to something is Things it that also to been Chris the per been carry as turn forward really the you've macro periods, some got sustainable integrating been future important I We've kind on perspective prepared turn think make our to follow-up But out. this of market Yes. level, to quarter-to-quarter very do a poised field. that, plays quickly respond at be

a set turn. With strategic And this friction. up so a it approach to been Chris one and some I'll when poised that, been turn is the sure that been over game, It's the the on I've been and prudent making there's it's more specifics. for approach. long business for pushing certainly commentary

Yes, not just $XX ton remarks, there, prepared Bruce, to comments in maybe but the there realized great progress some making had add we're of million a we year-to-date. that the it's confirm to

really $XX are leads an those being We to That Derek increasing of of of to but the over into the to Operation million technology innovation, just mentioned the bone, which not leveraging on program upcycle mindful of continuing are all X-years. the XXXX focus XXXX sustainable. from there possible and about these integration, we programs and million the cutting things gains, of M&A some year. already structural being or for $XX largely savings million, more productivity beyond shy to $XX $XX And million us -- gets are looking at

reduction. driving what's housekeeping you color then little And dedicated. just imagine and earlier the that. just, reduction? Appreciate from, I Okay. quick know, net the maybe from follow-up that that's that on coming a But, on One-Way, Derek free CapEx possibly comments made

Yes, I to think parts Bruce. there's really, it, two

one spend. is and focused approach we dollar any analysis every first as cost really part to The ongoing of just

in to led position guidance opportunities re-examining any also do and have The for approach projects. is for all that of what going to we changes since of to particular capital us trailers. to making simple are moments the of away would You fleet is forward. and down, it it has great we're walk what sustainably honest, and really led that has which disciplined re-justifying fleet trucks revise where and has the eventual reality not pricing, that also we to we in bulk us the take But in prepare led from kind and sure be start some of emission all CapEx, this which we've let's feel wanted age a priced taken keep us fleet

that it. landed. it like to dollar we've of to the call I range spend with not where so be was just that fleet half. just that it. the felt But So number at and And spend expanded. point, we want It's operate because to will and do us at between we're money whether of we believe not room We allocation. ever to where gives back to going every now the the capital We're the prudent to sized discipline this we is back appropriately, kind lead or as very day to to some exactly want make and thoughtful within would sure need

Very Thank you. helpful. Okay.

Thank you.

question with next Stephens from Daniel ahead. Inc. go The Please is Imbro

term margin. just thanks. the going lot about into this to these going locked get guess Hey, the can term, going savings get longer event to you that this everybody. XXXX May wanted cost we range? in Good that where be we've is back path can Obviously, But Yes. They're rates. started are business a I out near of towards long XX% TTS Derek, afternoon, to is and with depressed one, as XX% think to further to back right. better. dedicated pushed suggest year you

how product Just progresses years of we back as today, you're over move this how towards year, X.X given kind macro the next the thinking seeing that? you are

relative not a the do down what long And trying focus a heavy the organic have to work that don't larger inside believe we to Chris opportunities the a our to It's It's And we've that, return. inside dedicated synergies lot to need exact also on. We'd be term disciplined at is the pricing predict dedicated on do improve we'd and this into put know with get the we the you give makeup in to to to. Obviously, timing that will we've time Reed of break but this we to is date lot also now here like tech building. to acquisition of to It's since that we've opportunistic been what a second. done the focus fleet. a analysis investments organization like building. excited one and bridge goal. question. business both exact making. that a an we But applied develop isn't very we that, to go so us. up continue about do to where positioning tough to great inflection of something with fleet mix really It's and we're it's have as enabled the the the point they right logistics here a exactly come point. a see The signed that can't Yes, is without percentage I'm We we've it.

there's So, for of break front will opportunities down a you, of those some for Chris in of lot And us. different now.

Yes.

we've we decline income just consecutive would I the adding demand those rate in components and for that until levers but having at improvement dedicated timing the So, got as the a one levers that back is some result those levers term we lift trucks you TTS, in in of the just out, and back we're And Obviously, those that. and a in difficult are to confidence point way, quarters bridge, values of that of doing talked doing Daniel, that. on know, market used predict. resale the the to back that operating still improvement about in around coming confident second make we five some long But, margin, then back mentioned, structural up had sequential the range, more existing fleets contribution getting we're equipment higher the of to pace those in normalization and the plus value more everything we've haul, getting in changes, quarter.

of to income went QX adjusted X.X% from operating X.X%, to net or to went QX margin X.X% fuel So from X%.

So that to continue, but modest an that's a expect improvement improvement, nonetheless although modestly. and it's we

down guide, Normally appreciate And at quarter-over-quarter, a follow-up, XXX. running I would can not maybe logistics if award focus has in logistics Yes, then a you're I be the just but the normally sequentially. Chris, mentioned the as slides brokerage that. the side, on margins degradation some think

are to as from to in you the XQ the back or the puts I what takes in So XQ take expect you Thanks. Could guess, on a do remain ]? or ORR move we third or some logistics step of logistics black [ quarter?

move We question. do good expect no operating we in Yes, improvement sequential forward. logistics income as in

there. in stay intend we the black So, to

so Best Thanks of much. luck.

you. Thank

Group question ahead. next with go The Wolfe from is Scott Please Research.

afternoon. Good thanks. Hey,

sort So, know, I talking the know want you're you we think quarter last ORR guys a improved last than basis help expectations about? sequential and that's more bit think you modest just place. ORR I question, improvement as Just as talk following probably know specific up try trucking ]. points. XX what [ in that I on QX, directionally, don't about talked about I of that just little Is to get [ on usually about right well and again, that the ]

Scott, going [ than more to I start normally answer my we ORR talk Yes, specific with was about that's ].

from there. QX. opportunity on customer events the some So, there, Look, appreciate we to based your believe recent recent to I QX commentary is and improve that especially interactions

about As level a XX time, actually to like think horizon about. earnings set, with Those year a half or kind Werner go over back they about up. time if QX goalpost rough history half QX the down of look the to are go you

it will to modest QX about. We to you and the to will you QX on framework albeit same be from is time modest opinion word the are improvement think back QX emphasis see commentary the and some currently, QX gives the to but

think or you on any year, there's that's about about next for pre-buys how talk you sense CapEx? for I helpful. pre-buy the And thoughts something a then that that And Werner? guys, Okay, know makes do

be serve on to pretty fleet XXXX if place. age our to I hold wanted. that here fleet aged position our complicated of right were aging into mean, found got to up where want we to position to itself pipeline to do the where good Scott, dedicated a fleet it's so especially hasn't or a this may refresh hasn't go love our to come any to exactly It certainly positioning, meaning any. It think as fruition. now. I today like some we've in make able in for We'll a we're we have in I sit Yes, a we was of is of one others sure, kind and make

be see could by impacted right reinvestable, it's CapEx to priced our into the opportunity. got be dedicated need that it's kind right. You to grow to be got of It's to got But customer.

methodology. And kind out now, be heavily thing thoughtful we're is negotiation with We're be so we're not into ‘XX. to going pre-buy fresh putting on by driven come our We're we be trailer going going The to the we guidance, conclude the last above. current capacity the I to OEM about think too and as about those, say now relative I'll lands there just it XX to let's that of thought political and of some on friction, submission or CapEx backdrop but can in it's going make the of for with how some And of all just on any methodical sure back stance of not final and general. passed is not regulations it. truck our with then constraints right some ultimately stuff place retrenching could already the is the final it's and much actual taking the of subject relevant too and some whether requirements. just early that say, do talk versus of be right to some where that's of the of mandates a purchases And versus

part most XXX, fundamentally reports in of a sort And of time advance a those is the is say OEM some meaningful this I massive if that to cap going in regulatory hard somewhere of likely go changes? than cap ability that in simple to it is numbers closer of reality neighborhood was fear the replacement the XXX. a is think would There's and of last been level one than trucking and the investor these like to pre-buy about kind different think more pre-buy out cycles. it's Either community have been I make something lot is I support talk any numerous of to of around level. the

in look as up industry standards, right an back which situation. If of some mistakes us to good not it historical from a an end put the in both position you really of overcapacity and at past repeat

Very helpful. Thank thoughts. Derek, for you, your

you, Thank Scott.

Bank The America. next go of Please Ken question is Hoexter from with ahead.

Hi, of it's and on for question. an noted on a project based seasonality Thanks Derek, here exits you and the that comment, Maybe, to on the It's quarter- to-date. what capacity the Koski for capacity you Maybe activity. is return view side. state on how Ken Danimer update you're taking just the Hoexter. demand seeing

the both data, kind monitor not attrition money out continue that registration attrition, years. of the data, the as Yes, still of any present. ever maybe there. meaningful to continue to net are it's and everyone capacity, uptick, does, of COVID we we employment that it, We elevating pace accumulated see, ongoing they people think although of may of the It's have during attrition

lenders think a improve. And as behavior in that conditions I see have market fault. change think been a to lenient you'll I

end I lot to the to whole of out it there's make a people So, are that time. still other of, think going this not very dark

the our So, this, we're confidence sentiment with about customers. is is and us what in we that business, as gives think conversations we look having

period what just DAT as you multi-day check revenue customers our from one mean not had that fleets recently billion a We forum best and held happening conversations doesn't roughly here rates see with speak. we a that perspective, really like of the about And a day be data conditions from some differs had they roof, of end find know, our customers. a think be may differs $X.X that load what's post-load customer still that under across of And on our we front annual largest holding the every in market You network these board, and it some from in there Omaha. but over of to positions out bit why macro commentary might that's many feeling board, as high our on spot us serve impact. I Werner. like tighten my well-capitalized value that quality, in it's And data little also

we're So, turn. for the preparing

really prepared. You now know, put we've ready be to like again, work for right we're getting in to positioning and overly not but And the our it. repetitive, we

but operating expect thoughts to of gross sequentially. that for maybe is there? so logistics, imply on then that I income What any And mean, mentioned the on Thanks. helpful. kind you margins margins? improve does just gross pressure That's sequential it. Thanks. pressure, Got

know, of that of, four we that of, had is the as a quarters to work lot you get margin as refining effort portfolio, gross as through margin sustain brokerage. quality go Yes, margin XX% Chris. and on gross underway of much higher holding around turn. Adam, this revenue within in mitigate truckload focusing we squeeze forward We've There's

There's on working Power at logistics, a other have are growth, and including continue in that. Only margin we also which as is margin. to higher we the influence So, favorably, things strength can that gross

had and year-over- You Power of year growth double percent know, in Only six up volume. digit sequential in we've quarters both revenue

if So, positive. some change -- continues mix that that's to there, is

expenses then, gross cost quarter technology, margin expenses So, to and are integration. the SG&A perspective. down in that's And second operating we've out XX% Overall, year-over-year. in through in the through the continued take logistics

there. good So progress

there in confidence us continue in with income, sequential we'll cycle. that to some in gives together put margin that of even with of improvement the the All turn see operating the squeeze

-- into done in years that where answer. expectation the you of do line a prepare add we've XX% we in be the to now what time. and the XX% I we've addition some world say, that it's very we're is XXXX, my belief well gains be the What will can been real go competitive number. reality logistics, to productivity that in would goal, beyond though, other to, Chris through that And seeing enabled through got in how done. the for -- as to out That of that, fully synergies Y-o-Y? meaningfully is take be of and over I some the the improvement And alluded meaningful we're part the and XXXX is, of all it bottom going picking tech aspirational into real investment stated implemented a as that that up of turn we to is to and nothing the have And making was

and far to a got more as both opportunity early encouraged allowing -- that expand tech we also margin, signs. make competitive to as world I sure and do gross efficient in by we're to less the more be are with We've more the So excited but we're us see. about is will and can

you. Thank

The next Cowen. Jason go question ahead. Please Seidl is from with

Hey, Operator. touch Chris to Wanted bit and and Derek a Thank outlook. on your team. you,

there, exposure. If for little or some in your listen have Are the a news some bit you it to a different? pressure of the outsized out of bit forecasting you look out there at something low-end end markets? little McDonald's had whether are guys and Are seems consumer, some seeing change there always of maybe that Pepsi more you a you you

great question. Yes,

there. multi-part a there's to be I'll answer think I try brief.

we yes, in expanding which verticals we look fleet First-off, we were are at participate dedicated our exposure.

opportunities, are have not involved kind We be positions serve doesn't -- bandwidth for continuing to retail segment. very to that serve looking to and driver but ability hard our meaning to our defensible like of and in expand

we've portion higher nearly of portfolio, some of our focused is are In engineered of verticals retail and difficult as One-Way, Mexico, growing the same as value, which the transit. into part expanding our fleet, Werner thing, not cross the really of expanding we're higher then been with rest kind border, addition, to serve, there and work doing premium harder more services and the of that on expectations

They more any then of times. our are the growing exposed They're But not we're to original belief have than one on sudden is takes growing has we are discount we we're the stronger portfolio, really around of back more complex above that the their place is quarters been across that into strength. several kind of expected. consumer, things staying would based certainly well. forward. They retail resilient as in tend dedicated place. even these all our originally very across our question the this that uptick of -- of next Instead, those their become of retailers consumer consumer growth as All planning the well really it's because -- majority needs taking that's the that's, longer, part we business look and discount to the for do doing during space. but And

demand more consumer of of our analysis, up to bridge then So type as not we driven margins, right back execution, building think about kind long operating the driven term lining a model with customer. it's and this it's or engineering

you a talked follow-up, great Derek. how us first a the rate? is sort than That's you has that. that spot from told that What's sort we bit difference trucking spot of about that large some board, know, of your of color, of spot different versus not you're see rate out you see that there between the spot generic sort the And little posted load guys And the providers. company the

question, the It's for Thanks Jason. Chris Neil.

holiday number retain with it. check a that were a good of able into and there's chunk load gains. and increased think for I reasons saw to We those it Xth we continued the spot July a of

that customer of scale I load, part level spot. to with traditional an are and a to some access carrier than the there and think as unload execute, load are ability opportunity we live other less have boards that places commoditized live of less,

opportunity a I there so a think bigger to serve just it's other And customers. better as bigger, we've got carrier,

that addition balance. that, several have In network consider we tools to

and in think not considered freight helped some widespread with And addition, participate be Freight optionality good selection some scale had capability to customers of then to identify, projects yet, those drive freight for have have in we I although those to so some and provide to recommendations got and in have And us obviously you've rates. opportunities order tools projects. improved help will on spot selection. then

enable So terms parts together maybe play in I place market the of a some maybe all spot different that than then network. little commoditized things of of of those us in to think the more piece the

to would add One thing regarding... I

Sorry.

would market. improving as network refers it We're as the market. sit that, and thing the understanding network, minimally but comfortable I analyzing over sit that done roughly One-Way spot, we the one we The Werner analysis other mile prepared as market opportunities opportunities, that we XX% ways been of might we've as we One-Way look could our add influence to very optionality several leverage very, as And work and what Chris we end of is in relates be project per weeks to are we some within have as by rate like to have to in here today, spot freight exposed Traditionally, available we're the doing network. intensive the last and/or network, our do would to conservative well that so. which are we very where participate that fleet here the has today, to an spot very been still,

our to be level. customer base that We as really opportunities we're itself. have and get interim will to the doing so because a up in to going network it that that make One-Way sure those Whether XX that interactions we we present back reinvestable gets to is

up the to I in you tick That noticeably? And projects. anticipating work of you makes year sense. are mentioned half project mean, back here the

volume was and of project talked requires rates pretty go I to kind didn't QX strong. from volume it. that opportunities way serve if think with it's year too come commentary all an about early back ability it us, But, was a the along to say to noticeably. the actually appropriate of premiums The ago, we you from problem

to in rates QX, take even tell and since be you too will the doing normal reflective I were we couple that but the certainly It's have think a been as we we able look if plan of be QX to year, speak this some something place. so years be, how seasonality, complexity of opportunity it will we've towards work. volume that's project And work an to that's underway into see know, and early and for been late of that to strong

gentlemen. time, the Appreciate

Thank you.

The next go Tom with from Please question UBS. is ahead. Wadewitz

missed looking model more to to perspective on this, dedicated I ought afternoon. truck Yes, the how I we get good if Apologize just count forward. a but little wanted

to you're fleet. second decline of risk I that you think be dedicated or further do and pressures you some with that the kind size see of of how cause feel that XQ comfortable stable XQ reductions But kind you saw and competitive that, think we kind about you fleet pretty in there'd that quarter in pre-level? telegraphed that in when what's

nothing is back size guidance, mean, at now overall Tom, look But the half or -- some implies Yes. you I you drive. ink look end clearly fleet if tail certain of and it year right long at stabilization. fleet till

customer the very commented the the is and strong. everyone meets road, reiterate Where though, discipline is also versus I'll We that expectation. dedicated pipeline pricing

biddable terms number in demand now of And And number of amounts difference so how we're bid in of in trucks the out right already currently year-over-year time about opportunities, truck The enthused the is the is months significant or land or queue. and If amounts of the out trucks events, the but the back tell. one half, become many growth to bend? those either being is will will of there are bid. question dedicated toward in dedicated

trucks and it The important doing I for can the replace factor to what's so. do right cycle and now when into in we're is right this one putting sure discipline maintaining point whatever it's making buy at turn our to around and time service, shareholders that

that sounds that increased think, cautious stronger? Is that commentary But was driving competitive that, pipeline optimistic more constructive. because is that you're more earlier think if seeing lot the seems you like of that do I pressure. What stronger, to a year about the be some pipeline

do what So, you that? behind think is

and -- Whether how know will commentary. Yes, pressure a of of strong go? enough between and number a disadvantage we between the part, well the the incumbency it? and time always number that business world. We're There's of dedicated. pretty there's I the the the low We It's the competitive a and throughout. early meaning somebody the the at know the of differences has real understand don't bit been operating RFP they realize the they're The difference pipeline pricing business. bidders, business later

close in done, at losses. see on couple -- And don't out, Yes, a telegraphed, that we by turned to a some [indiscernible] And be encouraged kind of and now Those house, what's times kind look chain on we of in thought those somebody and strategic we headwinds might supply bids the underlying the so understand importance as in of work quality but of of just we're to as was still customers logo customer, the significant of dedicated, not similar more a headwind right advantage. so class did as it side going be that it the there's of door. the they view cases. the significantly be forward that quality that's we best it be that their could fact the to are

every the trajectory And work I differentiate and for a opportunity day. going through, us us. back And continue dedicated we to that get to think do the so is through in we're to on front growth of

half go, Hey, right still given our third more on fleets net sit statistic to couple implemented being in to the we're but relative Tom, We now dedicated terms back into guidance, way. than at, that growth get months quick first in of see a second the one in where we in add that have mid-year, quarter, order the to where we're being I obviously to realized would more wins the for net that, just dedicated in quarter. losses in we the

Okay.

truck ought see we that a So bit. think count, even XQ, you in to move up

we're this at Given seeing what time.

Yes.

time. Okay. Thanks the for Appreciate it.

you. Thank

is The Susquehanna. Majors from Please next go with question ahead. Bascome

July of see Thank one Derek, or really guess better I is XQ though, grow given other curious the gives didn't be you last the up, seasonality so years. way, could mixed year And talked that in about is, we seeing pause if and about more of quarter, back is side that you're typically if granularly you I shape was typically the form kind that I you think in XX of you what XQ XX and was will yourself in XX look sequentially. little how much confidence frame it of than this just about historically seasonality out it's year last you. that gives out fourth that what historic consist you that on the any talking those a you

the you question. for thank Yes,

coin spot a rates period few at to what to around earlier earnings that's the be goes QX when tends have relative that one about almost extended is look to things that bit to the terms trend a of that So, and me I then QX, being projects that seasonality market things for period. over in more gives granular toss always and optimism? be today, is get like anticipated. that more you being the it of at was equilibrium, hold as sand QX the line extended one QX a here further sit that a up. down. It's is goes in coming Projects steady decade I of that a Obviously goes plus implemented Rejection and or up whether originally continued asked up would talking to an kind start ran X%, over

Canal stressed things price resulting those doing trying optionality in the things and of inappropriate work the a term. geopolitical to would too I place, market, in this Suez give to of dedicated as predict we the issues be at reposition is this to to is the Chris mentioned, of -- due the so and rather being differences. that term focus QX One-Way reality and stronger the and need get the that's any value already flex to in QX Ukraine outpacing reality to consumer, to implemented I think I'd execute. election understand losses All the network, That on ports. and everything ready are war granular at that now of for up the able doing are the fleets me be all done those short think prepared pause drive that labor are is There in within work long taking me the be Those work the and it point. to with issues to about be to we're we're to the from, to need The just many going the between to on optimism. unknowns

being be to can't that We headwinds So were to but else, we afoot have I being clear as than headwinds that's to going that anyone's. QX is going rate mile line although rate I almost on still and lot of to the predict where it's have per under anybody there that most some implemented future and take time in gains year-over-year the sale we line. still on our living duress. inherent positivity seen negotiated market and of bids through the on our held we're out reduction that efforts a be. that about with because equipment that are to bottom rates, better are lesser, from better still come want than play

to So, potential. improve to we're and -- we but going to We're going maximize modest. be we're It's and slow to like here its but to from ready is be -- positioning. going to going our prepared it work ready

or Thank maybe emphasis of plenty an but answer XQ of year, put you of appropriate structure XQ of you're question not third kind earlier project cost for that you support about and project at on piece thoughtful other to that would work far kind just pricing a carriers not enough the the know and into you where last did. that the Werner? to project and the going lift supports When that for we whether talked quarter an be pricing typically to you get work that having demand the

Yes.

days. over the And become rejection response employment monitor in it's we next attrition de-stocking on that being not to XX retailers the to evident or think all above. starts Unfortunately, as become many that we going balance to current in-balance rates, continue the And like. sooner of side, that even not I day total carrier mention, this levels at and both visibility. to and just below looking have it's cases inventory it evident activity could the that I than data, watch think what

to And guidance. so be going we're our in cautious

much over coming that certainly can, we the paint to weeks, clear clear. try but next to more picture a just So, will the as become coming over it

Thank you.

question the go Fargo. And with ahead. Wells Wetherbee Chris is Please final from today

Good Hey, afternoon, guys. thanks.

sort the the sort additions into this. asked curious, get I'm of upper of as fundamentals a fourth as would band guess, a and in sort maybe to thinking of of the quarter. of we count into fleet what half about the it go the know, I dynamic the You you improving back But just you along get the this of dedicated in year the get of about similar bunch line, space questions

It want Is as kind Just more you're of just the uplift out sense also get it pipeline sort or some that it pipeline building include to well? does of the of getting bridge. how macro of simply sounds some like is visible. pretty

I as No, true current really of shocked to how both industry, I in our for customers think be of if count. number total expose trucks any time, well dedicated was others I comes most the think I and this people mean, number rate. down truck at are fully and to pipeline given pipeline in bids, in at it also win be would many may that

So when win market goes know run the lose, higher when We gets that the even we of comes and when traditional equilibrium, than know rate we to We are term rate down. that the depressed over last rate, to win that. rates that's a use rate a know months. long the more to looks win it a tight win and it's period XX the maybe we win down kind year get really use that like over whether we or case a markets what XX been rate

I think today. we're at equilibrium speaking relatively

bullish I choice We'll why and wish the level here. in starts and we decisions kind rate more So, the at be of XX next than There's up could strong. best quarter. to able matter rate to it's as but to our of count. lot that isn't and as pipeline from that able It's the we'll days. commentary tick overly truck But the been, a where be we're case exact a or win customer will serve is the making made we're win give more activity in best the yet I any to from that. get tell know further of a

quick then follow-up. And one

business. you opportunities Just business? truckload on to the of we the for guess, How get I can overall utilization the second One-Way of I'm do much get some year, side. assuming add truckload utilization we curious as sort more project half about in improvement activity, One-Way the of into the the see

kind I utilization. are proud really controllables. ultimate control, the great Yes, mean, with It's start proud. the way one team progress the of our We're of I'll made with question. that. really we has

seeing production as and that going to typically do. assets in in. incremental as increases in do can it belief position comments where We that make as the not haul, loads. a producing expertise positioned easy and You It's and those But kind It is Mexico. standpoint improvements from a in itself of assets make We're more market get at we're from opening Mexico. do to But of we're and there. to it class, come further. in production a but tougher our my do push XXth anniversary length effectively, off It The that about that. going are They're you well the of dominant hold efficient participating one We're finds possibly we're about that power can't to pull of above. doubt One-Way year-over-year by, difficult growth in about no There's serve ties to to it's much of in can do we Those efficiently one longer we're but takes to intentional. can here. forward. is go rate you it near-shoring. have digit in like is comps every go much all the some best and fragmented into utilize double and our the division everything your to work sure also

it numbers, So, project all the comps up of to just production but in put me me get about be earnest. year from great will ability of and the tougher. in will reality or ago that That's lends our to started the confidence great that incremental a continue here gives

so much. Thanks helpful. very it. That's Okay. Appreciate

you. Thank

concludes over session. back any I our to remarks. like closing question-and-answer would This the for Leathers to conference Derek turn

with today. I want for to thank Gary. Thanks, us everybody being

That I've freight the and execution things the cost can will position and inflection. operations improving We've throughout savings preparing controlling years the improve. for plus several seen coming environment has business. drive taken to worst us As been we portfolio in the structural what said, we've operating improve We're the earnings this on XX that on in better industry. actions focused -- for on focusing discussed the calls, are leverage we across better as

we're on long While have history we once it's normalize difficult market forecast of and of to a timing when deliver that performance tightness, again. prepared dynamics market promise exact

reductions term fleet is justify we but must are committed the remain commitments. taking pricing In to re-investable customers, commitment over an now improving actions reality, close business we longer a to we're the so We to discipline While achieve decrease. that for capital the drove our short, each for I'll freight as better and their and by America our that customers market. XX,XXX position associates dedication thanking other keep moving. margins our

past While downcycle as is of over lot longer the natural stronger company structurally years, nears its it's couple with Werner this to a been tougher today be for about excited end.

we are Werner you capitalize interest the to environment we current As I your like and from of I'd poised normalized all your shareholder day. rest you more thank value. the for deliver a to all and hope enjoy one, into transition in

conference The presentation. Thank you now today's is attending for concluded.

disconnect. now may You