Ryder System (R) 26 Oct 222022 Q3 Earnings call transcript

Good morning and welcome to the Ryder System Third Quarter 2022 Earnings Release Conference Call. All lines are in a listen-only mode until after the presentation. Today's call is being recorded.

If you have any objections, please disconnect at this time. I would now like to introduce Mr. President, and Vice Ryder. Strategy Senior Brunn, Investor Corporate Relations for Bob Mr. you begin. Brunn, may

which factors. filings much. welcome Litigation remind factors earnings measure Thanks morning's quarter regulatory morning financial is of of some Good very Chief and measure Executive and the within conference this More and you'll meaning and I'd forward-looking a Vice during statements Securities XXXX Private non-GAAP available Ryder's to call. today's like that to Chief this Securities Exchange you the presentation, all to Financial in on release, hear political detailed earnings Presenting third Executive the Actual and on Officer; earnings to and uncertainty are due and information these each GAAP Reform website. and Act contained and Robert are in statements these Chairman subject These changes call differ about based on to presentation from in nearest competitive, Officer. are President circumstances. call results business, the of XXXX. Commission, are management's John Diez, may Sanchez, materially Ryder's current market, in expectations economic, changes reconciliation and expectations Ryder's with

it questions Haven, for President following of and today the are to Transportation, Tom With Chain over Management Solutions Dedicated Robert. available Steve Fleet presentation. of let Solutions; Additionally, President Global Sensing, and Supply call turn me Global on and that, the

update then our value. the to our deliver earnings you pleased progress this with reflects We'll I'll begin in segments. make create growth increase morning, John to excited targets I'm business again everyone, our through long the how term. will for which business we strategy you which strategic a then long-term earnings, to and our outlook on significant Good quarter quarter's the all position record call this review I'm on thanks shareholder core continue results, exceeded quarter. us. you expectations to discuss and take with and we on by joining three very our third update. the over providing also

recent pursue solutions. start X. challenges, to and Let's Slide chain logistics long-term companies are trends, disruptions labor transportation to continuing supply drive outsourcing Secular and on including

As North trends strong we've revenue ongoing future We're continued activity quarter despite realized and a pleased these the for result momentum well America year-to-date, also of growth to has initiatives, contractual positions delays. sales that this returned our fleet to record in us delivery and lease report which sales OEM growth.

and Warehouse fulfillment warehousing multi-client our our grows to in supply chain Distribution acquisitions, recent & earnings. to strategy continued business. Whiplash two offering. omni-channel scalable supply Whiplash our Midwest and solutions, asset-light perform chain support expands e-commerce System, to Midwest e-fulfillment and These growth and Our accelerate well were acquisitions our with significantly network accretive

our and FMS. Ryder forecast. our from profitable primarily products During increased we invested customers optimizing We and EPS trailing higher XX% in full strong shares their These of and mid-XXXX used for authorization we our through began year Supply million technology segment XXX% a on venture the comparable is reflect $XX.X a value build our at suite labor the executed discretionary Chain to retiring reflect to XX for actions return high We months, Dedicated the We chain of as and equity an and excited costs return generated XXXX acquired targets, XX% and our significant in million increases in in X approximately XX% September, can in year respectively. above enhance expected million adjustments a of anti-dilutive the existing that completed average These to conditions in equity and acquisition also strong capabilities. million point that increased This forecast to results X.X growth and market to high create return percentage transportation by pricing We're that increases quarter, share full Board development also RyderVentures, earnings on product supply about $XXX a in ASR one earnings and XXXX benefits address initially Baton, share our rental. tech vehicle focus We out program is to target earnings and which this and our price capital single-digit start-up we networks. corporate XXX%, program. of new on which X unusually fund. sales successfully have resulting reflects for on business. our initiatives

continues of sheet to flow as forecast us by pursue increased The expenditures exit capital Our $XX $XXX and due proceeds. well investments targeted in also to OEM reflect million capacity to from cash announced shareholders. proceeds delays the vehicle year $XXX cash acquisitions previously provide includes million to We the to full balance our strong $XXX capital return with U.K. XXXX forecast our business. to to expected $XXX million as higher free flow approximately and delivery expected of million used deferred million

drive profitable to We differentiate implement continue services customer-facing and growth. technologies develop our to and

on highlight we call. of to been now, today's we've one for doing As those technologies would some like time

vehicles engage year. compared customers. progress the is service have per completely We customer-facing way. arrival appointments, RyderGuide in maintenance for focused the increase self-check-in a shop real-time This tracking to quarter, is to users through end-to-end XX,XXX within from to digital strong seeing delivering currently an and than we're digital growth a that services usage fully fleet a proprietary RyderGuide. experience, last area drivers all the active XX% active We're completion, reliable critical the customer with empowers roadside of been a RyderGuide upon month. more platform. vehicles key in at in-shop most focus on pre-scheduling platform and points, in the our FMS visibility Bringing customers bringing highlighting has touch for is servicing our a during value real-time experience with and and two that RyderGuide Ryder to the significant managers namely innovative RyderGuide, of platform users experience service of

allows drivers for management. progress example, For fleet faster location new deployment service standard creates digital interactive the real-time RyderGuide and for reliable for back of road. updates roadside experience fleet managers and more pinpoint our drivers to enables we on We their our believe new a and customers exact best-in-class as get

with Our third results. provide quarter in ongoing call solution in it to that enables this us for over business to to combined I'll turn expertise cover easier an with investments the our do now infrastructure, customers Ryder. John to industry-leading makes technology,

$XXX for in in prior X. in Page vehicles our 'XX continued third in sales earnings as the from period, of and earnings higher of per Year-to-date in acquisitions. continuing cash the flow as year, returns. were reached revenue for the in company segments. chain billion prior segments Thanks, of equity, million the reflected the record partially includes year, supply sale market well offset of XX-month three reflecting results third million truck share part increased expenditures. XX% capacity properties business. from vehicle from U.K. the to metric, free million initiatives increase the to the revenue higher from growth $X.X Return operations quarter Robert. XX% flow on quarter Comparable reflecting and higher $X.XX and all ongoing from a benefits the constraints quarter, $XXX prior Total increased free financial reflecting the Operating the our from used on by third $XXX year business $X.XX up all the primary planned capital proceeds, in in exit Year-to-date cash in trailing

also sold to lower to X% on above higher of was to gains the well a residual the pricing operating and of higher earnings. realized business. percent Fleet used and Rental improvement depreciation increased was higher impact from by fleet revenue Solutions performance revenue Rental increased vehicle utilization $XXX target across FMS globally demand. expense FMS by quarter vehicles $XX strong XX.X% million the fleet. the earnings a months, negative higher from contributed increased estimate value the revenue long-term XX $XX larger on rental Page Fleet from X. significantly a third rates Turning on operating classes. is increased prior prior in pretax low the FMS changes. of as on operating power Management both results Improved and related reflecting year. pricing XX% up trailing segment's FMS double EBT driven XX.X% at despite of X% to this all X%, for XX% wind-down U.K. the million, due of digits. million impact rental Management revenue primarily

OEM conditions X Page freight EBT used vehicle Tractor continued the used versus the percent to XX%. proceeds due vehicle vehicle results target decreased quarter. in strong, in tight vehicle range. XX% sales production as highlights Used increased proceeds and double-digit averages. gains Excluding FMS in North segment's reflecting sequential anticipated, the was declined. year remained used solid decreased truck vehicle On historical remain and quarter, availability Used market a above all prior and for America proceeds low sales constraints. still vehicle basis, proceeds the activity

sold exit the we our were X,XXX of used which quarter, the business. of to related vehicles, During U.K. X,XXX

vehicle sequentially X,XXX vehicles sales, inventory quarter. end, and exit-related third from October. of vehicles U.K. at prior quarter vehicles the below inventory month X,XXX sold XXX our U.K. vehicles the vehicles. the was majority of and The up end target X,XXX approximately X,XXX of vehicles second versus were sold at the year quarter were to Excluding Used the used inclusive X,XXX U.K. of up the in range used of the the

it pricing depreciation used residual for above Although estimates value well vehicle remains sequentially, purposes. used declined

due of Chain XX%. a all quarter, to Operating acquisitions to cost-recovery year primarily was EBT in to Operating comparisons. range. versus new XXX%, percent volumes verticals, segment's of supply growth prior in automotive on single-digit reflecting initiatives year as reflecting disruptions industry revenue higher the new prior earnings X. and as X.X% benefited excluding revenue up as acquisitions Turning business operating well increased Page Supply pricing the EBT also the profitable acquisitions and the double-digit revenue target increased business. revenue in chain impact pricing. SCS SCS and The and high the returning was XX%

to to actions, expect growth pricing results benefit forward. acquisitions from We going SCS profitable continue and

volumes EBT increased in high to business. pricing, well Operating revenue increased pricing was and to Moving XXX% from as costs due the quarter. EBT on as new Page and Dedicated up new unusually Dedicated operating sequentially second primarily high revenue of due address adjustments of segment's business. to a DTS X.X% line the XX% increased target labor higher to with percent as single-digit XX.

benefit to forward. growth continue to pricing DTS expect from going and profitable We actions

rental Year-to-date, billion capital due Year-to-date, spending year, million XX. expiring contracts. lease lower prior Slide year-over-year of of increased for $XXX to lease investments. spending versus Turning replacements to reflecting $X.X capital declined was vehicle planned lease up

CapEx to see return the lease XXXX. expect XXXX Our defer lease billion expected In vehicles vehicles full we to expenditures that year. reflects reflects the also by at year up extended approximately by lease replacement is to delivery and in due prior up X,XXX continue This in XXXX. growth to lease $X.X from is vehicle versus fleet unchanged and versus higher fleet CapEx America, forecast $X.X growth XXXX pleased by capital North OEM the year-end, $XXX capital reduction million delays to to be to third the a and forecast quarter, XXX into we're billion

primarily associated majority growth revenue With lease the next XXXX, expected year. benefit the occurring end will fleet of the and earnings towards of

forecast Our fleet by million, expected $XXX with year prior to CapEx or ending at X% year our rental grow vehicles. the below XXX full XXXX remains

Gross to X,XXX expected expenditures on be or average X% the to capital by full rental $X.X fleet be expect basis. a year vehicles between billion $X.X are We to up billion.

the We used $XXX $X.X approximately U.K. from between and million vehicles the from be our the FMS and sale number capital to the to expenditures proceeds exit billion. prior are vehicles related This proceeds higher of expected sale used net versus proceeds $X.X billion. business year. $X.X of Full of in billion of expect includes year

and by forecast expected increased sales million Slide forecast million reflect million XXXX flow in expected lease higher also XX. proceeds. from $XXX the to We to $XXX exit range proceeds in deferred to million free million capital to The Turning reflects $XX $XXX expenditures. U.K. our cash $XXX

Our below range. and end sheet the XXX% third XXX% is our XXX% quarter target the balance at of to is leverage

as is and forecast XX%, below remain ROE the balance increased prior year, for realizing Robert I'll core to our well over target update leverage to strength forecast. range to share call capacity to our to over drive to FMS expect SCS higher range forecast the the our ROE benefit the an targeted We in a acquisitions plans up provide of higher in half. providing XX% and XX%. EPS We from increased cycle the expected second to from our of continued on and as our back earnings DTS of repurchases. for XXXX to XX% returns turn XXXX

Thanks, John.

Turning and the June, cycle to in Investor earnings discussed higher significantly actions to deliver we've the core we taken prior our Day XX. At Slide earnings to Ryder's relative core peak.

also we expect higher underway We have even in will that core we the the initiatives reviewed future. drive earnings

line XXXX the in a reminder, As this $XXX approximately expect market versus and to a gains earnings more In rental $XX high excludes historically rental XXs for to the benefited to million historical environment. normalized have in also and environment, that with averages. forecasted return strong mid- outsized core freight gains results expect utilization we earnings million of estimated

has incorporated into prior our to for increase cost-savings maintenance achieve illustrates we've taken been driver these has significant savings our initiative in estimate A our generate continues and core actions accelerated side we earnings. growth earnings. which benefit, of Dedicated, to As peak growth in this we Chain slide million core the In target since and the profitable such, during assumptions the key period. left annualized the have $XXX Supply year. expect XXXX The cycle this of this in FMS, to profitable

the of end and Our benefit will increase lease an to drive the by future. substantial underway in describes more portfolio initiative returns. actions achieve The lease also at expect of slide to annual the come is XXXX higher approximately as side the pricing to remaining renewed $XX we continues million right with value, the of that earnings core estimated we expect

we quarters, past to contractual mid-XXXX. several implementing For costs address discussed see in and began high have the labor unusually has to the we adjustments been team pricing the

and consistent our Supply this and a single-digit forecast, actions As result EBT high of target with returned quarter. the these percent Chain Dedicated to

lease has half pricing these carry initiative. be been over under from contracted months next results margins. XX new the to Dedicated into first to impact the approximately the or our An XXXX. lease pricing been date new FMS, expected year Profitable also of carryover Supply and next additional expected XX% of in to under and our so. benefit expect pricing renewed portfolio We over this is with has actions In is benefiting model the to XX% effect service business Chain in

fully with earnings benefit has driver the incremental is of portfolio by higher as initiative core growth revenue an of estimated earnings. benefit the is renewed XXXX $XXX at upon another expect Profitable This We remaining total returns. expected implemented an completion. of annual to end higher key be million

marketing Dedicated Chain products driven Supply our revenue growth by quarter, third the and During trends and new sales double-digit and had in secular including capabilities. initiatives, organic

have chain Our earnings. shareholders. to recent capital balance our acquisitions, acquisitions strong with of provides with the which performance capacity two to sheet supply and to contributed return the We're us pursue targeted core pleased

proud drivers and in and recently to the on $XXX share these these core free earnings expect cash relative million position higher of execution future stronger higher also earnings I'm team's a the flow repurchase and initiatives accelerated program. key to of us cycles. incremental prior generate completed benefits We for fully

index. look sales historical are Turning to take accounting to residual used vehicle a at relative proceeds Slide We'll estimates current set where value XX. our

the XX% and proceeds, left relative the in our used we where proceeds. are shows residuals current order shows proceeds. of charts accounting historical XXXX know, set truck sales by you Both right risk. side our address and reduced of market many accounting in slide to our our historical As and residuals volatility show side approximately XXXX, historical vehicle to tractor The

For set for trough are accounting at trucks, estimates residual levels.

estimates set low residual accounting historically tractors, are levels. For at for

freight which We also about incorporated by impacted here, a XX% cycle shown of downturn range the tractors. our

pricing below and shows annualized has pricing but residual would of as are XX% estimates decline else As constant. peak purposes for all used QX the -- the expected, gains, from well to in get levels, begun accounting and XX% current be vehicle vehicle get from decline annualized chart million our we've also 'XX Used value pricing order levels levels. to gains to to zero need $XX would to

year key year vehicle to EPS comparable XX. to prior decline forecast quarter above the the prior performance Finally, $X.XX. of sales Page turning reflecting We're are $X.XX, our drivers also of forecast forecast. of EPS and below forecast up of full $XX.XX We're $X.XX pricing. vehicle the comparable of to from rental to $X.XX, Used current expected a year full year used in fourth an to the and $XX.XX raising $XX.XX $XX.XX, our prior providing

to our each. file outsourcing increase limit please to long-term our the today, morning. of and We're achieve higher remarks that over us our the material afternoon. We question note sales that we're a remain and Record decline XXXX results and position efforts we and Please to OEM core Rental quarter assume expected pleased historically market conditions is XXXX to October acquisitions to benefiting the year-to-date Our in the to production as forecast throughout trends expected That earnings continues concludes so product to constraints. vehicle lease to of our Overall, are the targets we're cycle. development. cover drive the term. the will occurring and remained in due confident fourth revenue prepared will wins XX-Q near favorable XXXX that growth this and sales growth. with strong that yourself is primarily expect used to year. new lot strong environment to returns taking strong late contractual earnings are had in one growth and actions this benefit this earnings date marketing fleet

we'll it this welcome I'll over we many operator. in the additional turn get back can. to as time, have take you as questions, the and you're to queue If At

take Alliger question We'll first Goldman Instructions] from Please go Sachs. ahead. [Operator our with Jordan

Curious, them range, like economy to down the your bit Dedicated continue you now see Chain a targeted bit? on the have of about you'd you that turn or those Supply a should to can or talk margins that your and little Thank margins falter to the ranges stickiness maybe little you.

Yes. good question. Listen, a that's

On you contracts our contractual side, Supply know, and businesses we these Chain customers. have Dedicated, the long-term where as are with

in But been margins there's we've even if the the look really So up historically. past when area in has some well, you volatility that one The exists, the very certainly in that backlog be challenges of term, with market, into still near expect, some the I volume as still I hold the around XXXX. automotive. had strong you automotive go would pretty would production well tell that to we

guess, to answer hold question, I really them during up to your even I well a pretty slowdown. expect So,

our Scott Research. take go We'll Wolfe Please with Group next from question ahead.

So used earnings fall, from now to XQ. you've but were a XQ flat. in to pretty drop prices the to XQ started pretty guidance got But big XQ

what's XQ million And in explain $XXX $XXX guidance help XQ? million come to your for if is maybe year, of normalized up So this anything the does just driving changing mind? that earnings with raising then we're

the trucks from rental Europe. trucks, tell of than decline QX, sequential there's also in and you to Used for next for primarily the trucks would It $XXX at year. half is that and But look used if same. But in I'll go more the up No, the really, QX Yes. earnings this is the beat biggest Then decline. you was year driver. stays million this the quarter rental. used year,

the end As that. tail of Europe, know, getting of we get out we're towards you as

now, we've revenue there got more right cost in. the than we So have coming

that little is in there. call declines, So, vehicles are of of the really majority just vast that QX. is a then rental. headwind bit the that's and rest I But it, used seasonal would a And

say I -- talk month a this, Vora then, say, of if you much have And you Where couple we ago all anything could but the was There that there's know don't stuff about or Apollo we can know earlier. have you say? anything Robert, do months HG I want ago. stand to on if or

policy, speculation. a of Scott, don't as matter Yes. rumors comment on we and

Company. say HG on the value on the the Vora we really know, not of letter, you of was all that the that. I And to indicative that's have price determined As

Allison We'll Wells from take Poliniak our Please ahead. question go with next Fargo.

is Is go to certainly It I want case RyderGuide. the know there to as kind we Ryder. days, it's accrue Just the or on maybe productivity to penetration, there? clear time? conversation -- efficiency a you the like about it of that Just think can there back efficiencies on through early any a basis, way of but that think over for seems thoughts transactional a sort

really we're makes color just working Tom, think easier excited adjustments But and making we've give it -- little about it's a to I over efficiency you the that from business helping we're that to Ryder we're me a makes of Tommy we customer and we've for a with and on Yes. And gotten do let feedback enhancements something while. from I for lot on customers it us customers, to it because Look, it relationship bit how it. you're But think an standpoint. stickier. and to hand see mute. more been on

wrong the turned off. device Sorry,

that. about Sorry

go. you There

now they're better at completely event. We experience, experience much experience. all moment the that with calls kind going I'll stakeholders the wasn't that And all So, that customer think about digital phone recent and to comment via within on we and delivering mentioned This breakdown back-office the our phone in a of just out a a and to Robert we track make one put event And previously, wasn't event, base, around which efficiency multiple just and when gives for track to customers our broken as during breakdown. great ability calls down. the the a our eliminates those question. a of efficient you process if functionalities a what's visibility of about of a truth view customer functions

will see ways: from visibility; Ryder, and an customer for of think the big us in certainly, office benefit it back standpoint the efficiency two we we terms well. So, in at help as

from question JPMorgan. Brian go ahead. Ossenbeck take [Operator next Instructions] We'll with our Please

uncertainty Dedicated, about lot bit where the labor broadly and there's a stands broader now? and that given a like. Obviously, SCS Just of pipeline rates in equipment There's contracts of up, probably for But cover right are to mentioned, in on going kind the to the of catch-up you constraints as all ask marketplace. OEM wanted more and little feel to that like other. soften the Maybe some can time comment some as we competitive of way you right a does stand? competition. demand bit go all that on those or time, from more you Where seeing the of of starts to Are outlook get I costs. contracts Because that one the a any now these bit?

well, include let I'll sales me ChoiceLease Brian, sales. Yes. -- strong. also are in ChoiceLease our

that have We signed into year. and business us third currently already certainly lease of the a takes quarter through next

in. So business for a in locked is lot and trucks come of waiting already to the that

On Dedicated in year-to-date the we sales on we as Supply those Chain have businesses. record the call, mentioned and side, contractual

me to strong to very it pipeline continues to So there. you But hand it give Steve color a on let little be pipeline. the bit over a more

historical pipelines as Robert quarter year-over-year and we QX. had this sequentially Yes. versus I both think said, Brian,

in is Dedicated we're seeing So not any there. Deal any size right softening and seeing not softness there. up both so Chain, Supply

the I verticals grew Supply all think key level. industry Chain call-out one within in is double-digit

is really right on all it So, cylinders now. team hitting

the just next maybe CapEx up? and for I Do does And more guess flow year of next you initial for to some that waiting the I'm visibility trucks growth that this get as for have already demand? year you a be to John. What CapEx to you thoughts cash little flat flow year? a going a mean show bit Okay. free are think follow-up your cash What this given free sorry, on is -- flat

as CapEx $XXX spill the into visibility Brian, on of we FMS out, especially laid have, Yes. side, the do obviously, to we the million XXXX. expect, we

free higher any year, for given towards environment if you have flattish activity said signaled flow year that. for to year, call level next a really kind little in growth it's of although about previously, bit FMS. So have we we yet, cash still expect And that's into going we CapEx next and but haven't do early a replacement we what guidance next think lease the of happening

that's we have. So the direction

Please We'll KeyBanc take go our from question with Fowler Markets. next Todd Capital ahead.

John, to would on with are something follow-up go sorry, different? you proceeds the flat $XXX ahead. next down just flow to free say think cash that million guidance comment. or this talking year, coming When a of $XXX with I million year -- flattish yes, you

Yes.

we just So kind the clarify, break-even flattish a there. when cash of we're say talking to flow free flattish environment,

So, proceeds we're as going come CapEx you have flow spend to enjoying expect in free number. then levels down, is uptick the we record to that year. which said, used to from the vehicle this some going compress do level, cash And you're

to We back lease, year. mode you've this be in would from carryover the growth year next some expect in of Right. a CapEx plus the got of

around cash estimate the So is yes, flow I best zero of think probably right a breakeven now. free

the you think contract for we growth the in a fleet to actions to the response gave quantification apologize, and 'XX what Okay. visibility When pricing But follow are about question, been pricing contracted is you the to EPS That annual already and helps. starting one, just lease lease fleet loaded think and into equate initiatives on to Robert, signings also And as Kind the I pricing? you some the you the that wasn't booked original to that's there. could and I off being side, just the my with get contribution have so from where kind of that way there the I target. of lease back-end growth of another sensitize get 'XX? already lease up kind

Yes.

Plus, X,XXX-unit starting we're growth about next the So in think fourth fleet into the of go expecting next we're it, right? benefits year. that you quarter, If growth to with year. are going

to going growth a So in next we're fleet delay target think the just lease end above if such of or getting that you levels, about had we've lease because our vehicles. probably be those at year high

year -- we're you just margins. And get is we a to and earnings. today. the this half repurchase giving benefit next ASR, a next broader year year as to going That's core going without year did, expect year next you biggest some give year. driven going earnings only to say us The also by that we Remember, earnings driver Chain is the a share on would the give year. in view, that's seeing improved significant that in Supply So to year a So of growth core full for Dedicated, and I I million higher Chain target Then core earnings, full a our year guess we earnings next to benefit. growth that I'd all increase having which forecast. going we're a next Todd, you're improved growth driver from about Supply talked of $XXX are to Dedicated be as have right? going in to we contribute wasn't lease, that

We lease you And some pricing got some -- be be partial there'll $XXX a initiative mentioned, to be up next the will year is contributor. also from partial strategic to think then maybe I offset be about a and there'll overheads with you say, core have earnings as that the going investments. million. would But

expect likely point down some year. and because Now to rental you to earnings earnings in the -- next at to come used half the down expect of probably at continue some the be time bottom also. you down prices vehicle year overall slow And will then out back

down from that, although, marketplace. for because vehicles expect mentioned, headwinds the such need So we I still as slow rental is we in haven't seen some there would still a

million was about that moving buckets. how big we is Yes. the into 'XX. that's at of $XXX helpful. getting those And that what really think And were I kind that's I think Robert,

was helpful. that So, all of commentary

Please question go We'll Bert our next from with ahead. take Stifel. Subin

there's positive talked about fair an VC would we've SCS and arena. that So, I been the the the And story really activity and across in private in Supply But for what increase, has equity say, place? Can Chain, competitive landscape a across been think Ryder. there barriers that to do talk have just seeing SCS? on you're you you about will amount entry you remain

that's do would our years it you, just the barrier and is to really Steve, business And Add that Look, little really compelling customers now many to and for a business, what And answer technology and has as a looking that don't we've that, a in it prop. -- we've to in bit we more that's our are our become Yes. working would really as him our value quick But you and had to is not and I capabilities replicate. added, of that pretty I color? why there, capabilities easy easy entry tuning us tell not an the for. what give capabilities. say

The Yes. of Robert, is piece. investment the a for of us. to, Baton Bert, technology announcement key I'll the just add acquisition

That's marketplace. seen out over the a differentiator the build RyderShare key years. in us You've

technology is Whiplash stack differentiator. with Our a

and We have RyderView X.X Last Mile.

at the But it down is and a technology long to got the of key customer. the people, end the people. the comes tenure, So deliver day, We've to great promise differentiator. on they

comment clarification the verticals. all earlier on Just of as about a previous industry a question

matter You guess into show and guys autos strongest your to had really that to end, that I it's talked stay about no double happens? coming there a starting runway the of what tailwind 'XX, as go digits. Is to being you sort with a segment for

we're of what production industry there. needed just is because backlog so that out demand that believe seeing replacement in just meet We to the with still the our that's Yes. customers,

the it's -- business and that in. this to strong, we and And in of almost the relatively been XX a XX has through U.S., now typically, the then -- producing exception year. during auto least autos million staying relatively COVID. million that forgot with since the about as again the of stable filled the in auto terms steady see you was at Great of half Historically, Recession are And COVID. first get -- historically, year we So, demand

we'll So, Ryder transition in that the play to assembly. logistics still that we to has would key more I going And into very electric, a even as of back mode. go expect role forward,

with next from Please We'll Ossenbeck Brian take JPMorgan. go ahead. question our

Yes.

thing here. Just wanted one to clarify

But In terms think, and final you're I off Baton, sort how of started maybe they've the pivoted know of a I mile little know autonomous, delivery linked think had with they also working since drayage and a, I talking more I on from invested in. into that which they then. about side bit maybe

that And they can more UVS. just a guess, have and seen some maybe the on of just a separately, in still see material early place? little how is divergence in in about a that bit stronger, So industry. view are you little one that really Does little weaker. vintages what market? trend very then, you getting talk bit impact exactly the much is any you on some downward Or I UVS We've too some the

and the we're Baton what on excited about answer then color one, to Steve give first to really me Let there. I'll it hand over a more you and little

as seven-year we're to selling vintage you On vehicles. typically the know, side, six- UVS

we on that expected, tell as behaving that certainly vintage the tractor you would we I track. that's typically it's side. the So

we But want are I expected. vintages better our look to do go vintages color a next on think those on give you with to of we are Steve, those really think originally than more are it's kind holding want monitor to I into going trucks him the we up markets, year, as where if that for. -- little Baton? the you

the develop key shelf. needed are stay ahead is in-house. to us technology the still buying But that competition, we think we I Brian, Yes. technology to the really for off of

eliminate waste our to and is chain here supply in key friction, Our operations. our eliminate in customer

business yes, kind dray-type model. base of of their So a more around a was

I think focused we on going can and on that, be supply optimization. they're and chain transportation to build

to move keeping great them the a we addition and we ahead look team, So competition forward the us forward. of to really as

Group last question ahead. Our Wolfe with from Research. Please Scott go comes

to just is separately, why and about you then continue back maybe just were utilization don't of sensitivity Robert, can again? up environment the on rental and the that we maybe with And math the you walk talking freight pricing your just comments the that holding go can -- much the why that better prepared gains through and -- the in thoughts used sort on so in mid-XXs? given

your can the I'm sorry, Scott, part repeat second you question? of

Yes.

that utilization is there holding think chance is I environment. mean to a just back rental given so -- So Is normal? we go don't the up you well despite that -- the really more mid-XXs freight

I John it to then over hand piece. -- think I'll I'll and answer part, that Well, Right. look, vehicle to answer used the

rental rental think are to our demand last going the made low and Will but to we service that the them higher. there's road the some Probably out the achievable. that higher how it in us is over changes XX-plus it keep XXs But things of fewer stay certainly help get keep have couple also XXs us throughout think, which not, having side, of we years, this think is level, we the year? of towards really trucks whole process, we've internally we On clearly, that around on utilization helping we around done percent.

keep So, trucks come you it part truck would is will used want but to road. the the some do you of part question? on I also tell of doing things the to of market John, internally the down, rental our we're is it answer that

Yes. Scott, deck in is so contemplates XX relative from what us Page of we earnings, a core gave to out there, you the on we heard million gains. annualized one the sensitivity of $XX laid which commentaries the

then, in would get level And So a at XX% would sit $XX million to in where to of vehicle we're drop classes all need an across we where a looking you annualized gains, QX. we provided need at you gains. get in from see QX, to drop to XX% zero also to

we which kind sensitivity still So, say now, highs. at levels. relative we're I would today, of where pre-pandemic elevated to that at we're sitting was are the gave right

distance So, to bit before there's still quite a get that core we of earnings-level number.

-- I I fully go just sure Can I not sorry. understand I'm -- -- ahead,

basis. annualized an on That's

there -- year think about for to the So to zero a it stay gains year. for get to full has

I'm to what pricing go zero. million so down another following $XX to only from used then gains goes to if it not you annual from drops in like million guess million. $XXX I drops like of had is from -- so if of or XX%, -- million XX%, really it the -- quarter, go from an $XXX $XX we to Yes. But down X% and

the off. a just or missing I proportions Maybe just So question I'm better seem something. know, don't it's off-line, maybe

could delta tractors where set The trough depreciation the Yes. we that to we've of further we XX% depreciation fleet that tractor down levels those on on be the have already that side. taken the additional

and to helps delta the also buoy that the that between So million $XX zero.

Yes.

our take elevated tell help above you proceeds would for with you to you you, if Just sensitivities quarter $XXX America and there, second the that, annualize you're North I million.

mid-$XXX And points in that that sensitivity. you you eroded roughly $XX gets that You're the that million that in to gets apply level. to seven

you. the but that's we're simplified that's a But for talking certainly up you that. just did about, follow we math level with that So, could that I on

Please Stephens. Long, Justin ahead. from question go next our take We'll

it's to of being the follow-up used you sequential drivers use on the earnings to of in in one from also mentioned the to XQ. but drivers one to wanted I pressure of the quarter, upside key Robert, key earlier XQ some commentary.

you're assuming used in quarter to go So decline for fourth what as truck share pricing could quarter? you third from we the

down were pricing Yes. Look, XX%. and the or XX%, we're down truck down -- was Tractors you -- as were truck quarter. tractor down saw, pricing in were trucks

that is want do more clip, a little at we're expecting continue. that So, to of a double-digit just dictate kind we we're signal of to But yes, trend of expecting nor exactly to that but maybe of the market going market quarter-to-quarter little going expecting exactly The where go. It's to that. level it's we're pinpoint decline. to decline, continue, to kind bit a hard that slower

thoughts next moving here was it. XXXX then talk we've I with on your That's But could year if well Got was you wondering, getting into as rates Okay. given the directionally And about just interest seen sensitivity helpful. helpful. just rate recently. what

John?

Yes.

projecting, look forward, to So even keep as you we up. in rates moving QX, are

If over about look coming up what's refinancing, you for we just $X at probably billion. got

to going this cash be free the tremendous. flow year year. that's Obviously, has been So refinanced next

to debt the had markets that haven't we much. in be So,

into the and were to right We we are go go -- market. projecting now if

-- for You're looking at interest the neighborhood in of rates X%-plus.

up $X that's interest The good healthy in thing increase only got over next from a for it's the is balanced environment. So, billion we year. approach, our rate refinancing

Kauffman with ahead. from Partners. Please Research comes Vertical Jeff Our last go question

you First picture bigger of of seeing want and Supply rental to fleet. all, larger between you're strong still on fleet utilization congratulations. kind It's think very Chain just I a on mentioned I what business, fantastic know results. your

I've cracks happening. mine, I the of you out we're seeing then be that seeing the got on what side? supply Or this kind back vehicle the the and rental just are of in So, about Is dam? down." truckers not you the "Okay, but the you leasing world hitting different just what And growth If demand what's changing a side chain are seems and seeing different? nervous are organic the periphery? in us in that to lot later? canary I And at coal really acquisitive are are on slowing growth, seeing rest saying, industries on things that of the So economic the look

trying marketplace, I rental of -- benefiting certainly on we're Well, OEMs a delays the demand in up caught production. vehicles shortage There's think that past, truck seeing seen also, as that are in get from the So to you're certainly, side, there's right? still benefits on side. we've e-commerce this seeing say, the on the of in talked all we've I that and the the would the about

significant So, demand there's amount for of definitely the truck a on side. rental

don't in to you in for organic And an seeing seeing really companies really want companies why think little We're ripe side, color? a I chain years more supply had you're me Steve, that's to give last the hand of improve focus let mid- couple it the environment that a from that and their chain looking for that and Ryder. chain, growth him interest they're of like Steve, supply have high On over the over supply is lot you. to why on XXs companies to But help.

organic was double digit all reiterating quarter, that verticals. the in just Jeff, industry Yes. growth XX%, across again, we were

I think it's of things. couple a

that that continued pushed side. and the out in is on there, creating companies And Supply the as our of too. that. It's business. the awareness in difficult again. said found a we've to XXXX. historical Our before, third really Ever of hire I campaign, This continue both hire Dedicated pipelines invested warehouse year better business, our recruiting of Chain ability the side And it's We'll lot XXXX, a during 'XX. brand that getting to drivers, And we Robert think workers,

our differentiated So, And that technology. in We've technology some and close don't the our just with have I'll have customers either. situations, it's business. got competition not doesn't then, easy

of I'm down because can. customers you I if follow-up, demanding demand one world just kind time manage were And that And evaporated. last Robert, of when your was we What slowing about you. guys you and do how the decade were later, middle around? thinking what growth feels then now? it. seeing to of just this And Thank different back to growing right trap you're the years again X.X the rest avoid the to

is Look, that fleet, see Chain, going in much years, -- growing would think we a is you the certainly we've about where XX% core remember, investments we -- and side revenue, of side. about to last -- too it couple volatility though been their the less then on see to you're I tractor Dedicated, Supply there on truck also move rental is And spec Yes. grown the lease, over the is the more prudent which business a to than going to not know, The You're rental. of that than because contractual, And you making around the of have slowdown, products the the customers as going same. our we of even in -- otherwise be continue even that. right? more in buy need to what on we've

we've made we there applications. feel ride our cycle making are and changes So feel in and about fleet about adjust putting trucks manage to them well rental them lease from that to applications, taking we're putting We investments quickly we the good that. dedicated in going how rental the good by through ability the the out and

So, a recession. really that. for for We're in a slowdown preparing we prepared feel

environment, is And will those where a same think grow about headed. the testament scenarios, just continue And our every really slowing earnings this company we in even we're thing. to be will good that. I doing core idea to I like economic we're running feel think, that

questions. additional I'd Robert back over the to for to call At turn this no Mr. Sanchez time, remarks. there closing like are

several and questions, Thanks for forward I the Thanks, the over the to interest. Take months. seeing Okay. for and Thanks being next the look call you on everyone. care.

for today's participation. Ladies all you Thank and gentlemen, that concludes conference. your