Ryder System (R) 23 Apr 242024 Q1 Earnings call transcript

Good morning, and welcome to the Ryder System's First Quarter 2021 Earnings Release Conference Call. [Operator Instructions] Today's call is being recorded.

If you have any objections, please disconnect at this time.

I would now like to introduce Ms. Calene Candela, Vice President, Investor Relations for Ryder. Ms. begin. may you Candela,

morning, Call. to Good XXXX First Earnings Conference and you. Ryder's welcome Quarter Thank

regulatory to changes you and of results circumstances. non-GAAP like statements factors. detailed are economic, Ryder's on forward-looking the these Litigation I'd subject Commission, remind business, earnings from Act may are political in statements and hear presentation, Ryder's Reform due a in and each current market, these expectations website. call about within of nearest contained in differ some based Exchange and which you'll release, to on materially filings the expectations XXXX. uncertainty financial More are Actual meaning factors of morning's is the competitive, information management's to Securities earnings with that Private to available this presentation These and GAAP the during and reconciliation this measure in measure changes Securities

Presenting Diez, and on today's call Officer; Financial Vice and Executive and Officer. Chairman Chief Executive Chief President are Robert Sanchez, John

Havens, President of Chain questions Steve Supply the for of Transportation and Tom and today Solutions; Management presentation. Dedicated call President are Solutions Sensing, Solutions, following and available on Fleet the Additionally,

over to this I'll the turn At time, Robert. call

us. morning, Good for and everyone, thanks joining

team this delivering that again extremely conditions proud I'm of our despite quarter for freight solid results remain challenging.

made profitable that cycles. of Our business returns profile that long-term versus operating prior demonstrate performance and drive to significantly have growth derisk our we've increased to business transformative changes the enhance and the the return continues model, earnings

through benefits cycle how sales have first savings positioned of then an our exceeded to business expectations, you well results Cardinal maintenance quarter update integration results, with the discuss review today's key our providing the which then you the strategic upturn. as I'll from will reflecting begin Logistics. take cost John as call better-than-expected benefit we our outlook and on used by updates, our vehicle I'll from initiative. and

X. Slide on begin Let's

Executing the recent on to have X. or continues our Fulfillment our Logistics the Slide integration of of is IFS, drive earnings to outperformance growth cycles. acquisitions prior higher freight been strategy demonstrating and and profile current cycles, to our track. our of The Turning phases strategy. balanced effectiveness of prior Cardinal cycle, all Impact on than relative Across return Services

As acquisition Cardinal further you on and as X, growth strengthening a recall, may leading our we position completed customized of of the Logistics provider transportation enabling solutions. dedicated February

in year, CPG additional and November completed some co-packaging I'll information of last which the added shortly. co-manufacturing X supply provide capabilities integration on primarily we chain, supporting of IFS, this our acquisition business.

We value the of continue to growth large segments, in favor business customers. our X addressable solutions markets opportunities trends to supported long-term by see bring that secular our all outsourcing decisions, our and

enhanced which actions, to XXXX, our our initiatives. include target reflecting initiatives are well all for initiatives partially on pricing recovery returns margins cost FMS benefited year as expected full SCS at XX% in rental ROE returns. given we trailing is used period with focused has of for and weakening XX-month are initiatives our Adjusted cycle. on vehicle the line Our impact conditions in from and execution offset EBT by the These enhancing market management on their as in our and long-term where The segments. in ROE expectations target sales been playbook remain and FMS. the our reflects achieve asset

to the segment's reflecting continue EBT XXXX, target just costs. be in other integration and margins below to DTS long-term We expect acquisition related

pursue with sheet capacity strong to continue and to provide well investment-grade capital return Our shareholders. us and rating balance as investments, acquisitions targeted as solid to credit

under X million have X million discretionary as outstanding. program, our these for have anti-dilutive X repurchased million shares with XXXX, of program. a repurchase programs. XXX,XXX XX% authorization currently shares During Since we program a share remaining as repurchased approximately approximately the our quarter, discretionary shares share we under We in well total

We our in mid-XXXX. by dividend XX% also increased

by solid performance the our believe to for executing flow to XXXX $XXX and to full and capital continue strategy due balanced of quarter to that growth free our encouraged over to $XXX enable million cash forecast forecast the $XXX is million, year lower than $XXX negative primarily negative rental million We're in cycle. first us higher highs Our our expenditures. million, prior deliver will lows on higher higher

for In peak shows of our of This X-year our prior a was on key a growth to return XXXX, for the chain EPS growth $X.X our metrics of and was XX% comparison and and $X.XX $X.X that balanced strategy, forecast. Slide billion financial X through from of billion. flow operating revenue of of million conditions. time, Supply At generated equity cycle revenue comparable cash had XXXX implementation XXXX rate freight during XX%. of operating the was majority we FMS.

will Now generated shifted and did compared let's XXXX. growth, SCS and meaningfully vehicle be to sales technology, $XX.XX of year expect mix XXXX our strategic innovative to to XX% today. expected rental, our returns business to with revenue and XXXX the XX% ROE to compared look in expected and at asset-light businesses model during conditions come we have from that DTS, expect represent XXXX to be a revenue generate is trough we towards earnings and is it we're than EPS XXXX. transformed $X.XX the what expecting peak. $XX.XX in XX.X% Through from to these XXXX In Ryder used higher well we in XX% acquisitions to XX.X%, in above XXXX, expected organic comparable

is Supply to chain expected also XX%. growth to increase rate X-year

and our businesses, to result is XXXX billion lease, to Dedicated in cash flow billion expected in Chain of grow from growth this $X.X profitable Supply year. operating $X.X contractual As a

to prior the here, expected shown cycles, comparing peak even trough As business conditions. prior is outperforming when

beyond. for our by encouraged far, solid us transformation and from of position am I that XXXX the momentum I'm execution and thus initiatives confident results the and multiyear well

demand acquisition strategy by in advances continues to growth important part balanced DTS trends, freight RyderShare Secular visibility outsourced growth pursue X, to to the to for an of create X. dedicated profitable continue as Dedicated and acquisition and Slide fleets shortage, including business. driver accelerating On of the value. solution. transportation to drive further Logistics. our such Moving technology Ryder an our private completed intelligence Ryder's This be February shareholder business Cardinal strategy

a Dedicated the cycles. has earnings cycle, Our profile freight shown current business the during over demonstrated as resilient downturn well during prior as as

to Upselling benefit business enabling some DTS services largest FMS increased to time. maintenance synergies and and asset and management Dedicated driver for with to and of DTS activity our access for Finally, from also their customers benefits has pipeline been for incremental FMS. cost Dedicated savings. sales DTS customers lease FMS, new sales from operational deliver the equipment, from drive value

we The net is synergies to X, and $XX be X first year $XX in related integration full reach in million realized million. The expected category between belong we categories: expect to synergies As largely to significant with Prior Consolidating efficiencies maintenance Ryder vehicle services to savings cost going Cardinal is third-party various expected maintenance costs. forward. acquisition, providers. asset management generate from the procured and activities maintenance and

is financed financing fleet of category cost Cardinal's related X/X companies. with through third-party banks leases. leases financed operating Approximately and under second The is to various operating vehicles savings

Ryder financing. equipment cost with maintenance Ryder's acquisition As be expected lower leases majority replaced and will from of these savings. vehicle The vehicles and vehicles are benefit owned costs will mature, which synergies from these

as leverage existing benefit addition, we integrate to we from and operations into and overheads. efficiencies, the operating In business our management expect

We in expect second the XXXX, accelerating in these half benefits XXXX. synergies to with of begin

to of of majority $XX the integration expected related total Our million the In we mid-single costs be track. integration costs. on costs. integration be to reflecting Cardinal and is expect XXXX, and represent EBT approximately acquisition digits, percent XXXX are DTS estimated other integration

DTS Cardinal $X approximately portfolio synergies the million By in the add high segment's DTS billion is is target. the annualized an total and realization and percent to segment's excludes transportation. of to which legacy high target is in at single-digit fuel basis, expected EBT expected the transaction of operate revenue, to $XXX Our percent XXXX, operating EBT revenue subcontracted On back expected to XXXX. single-digit drive approximately

Chain end X,XXX of intersegment vehicles X,XXX FMS XX% in As maintenance. acquisition. the a revenue DTS and of be reminder, quarter trailers reflects fleet and equipment the include power will will from approximately at and XX% DTS, approximately in leases from revenue reflected inclusion count Supply operating

We accretive XXXX and synergies XXXX in meaningfully achieving accretive transaction more the expect after in marginally to efforts. to be and continue completing integration

that and are confident very opportunities believe ahead an We're to of value Dedicated and synergies continue benefits a team will driver successful and about Ryder. for is focused achievable. The excited we realizing the are important be the creation on integration

call the over performance. quarter to turn now to first review our I'll John

Robert. Thanks,

lower rental in the used recent contractual vehicle $X.XX prior the in from Page are down Total Comparable and quarter $X.X share quarter, year, and earnings the company earnings first up of first ChoiceLease in reflects first were chain conditions results offset billion results. quarter, revenue $X.XX prior growth, per partially The by year. reflects and decline Operating in by continuing operations X. offset weaker acquisitions for from X% partially higher the market supply rental, from the primarily revenue. sales on

was from sales. vehicle Return first line The conditions. quarter XX% for million target in used high decreased primary rental cash proceeds weakening our sales reflects year-over-year Free and to market $XXX $XX primarily from on in and vehicle XXXX, and equity, financial million teens our lower over used due metric, the cycle. with decline the to flow property

operating Solutions partially decreased to half revenue operating on due X% results growth segment. demand, in revenue about rental with by to X. lease from intersegment from Cardinal Management grew X% ChoiceLease the organic Fleet lease offset and vehicles our Turning Management Dedicated remainder higher from revenue lower revenue. ChoiceLease Fleet Page coming

Fleet $XXX anticipated. volumes. as in used vehicle reflect lower vehicle to was quarter as the Pretax used impact from elevated rental year, Results The compared demand. partially down higher well offset prior earnings vehicle by in used pricing Management levels and in as the year-over-year weaker lower pricing million were

conditions prior Rental typically pricing activity, XX%, in the mix power trucks to with X%, from in the XX% for that year. rental sequential in fleet Rental the quarter more rental down utilization a market first results weak, on the decline fleet fleet reflecting addition reflect fewer we and in tractors. quarter. see declined the remain was Power

is the the expected quarter, operating of in higher low a full in our vehicle and the year sales from line rental be long-term X% impact Fleet quarter and maintenance market with Management from conditions as percent ChoiceLease offset target used segment's to for weaker double initiatives results digits benefits saving the was earnings of During cost businesses. EBT first in XXXX. revenue and partially

Page X vehicle for sales results highlights used quarter. the

better anticipated, conditions elevated proceeds basis, sequential a weaken used than proceeds with in to used for prior year. truck X% and from XX% continue declined expectations. tractors slightly XX%. used tractor for our year, Compared the On trucks levels and market proceeds decreased vehicle declined sales As prior proceeds X%, for decreased

we quarter, and and XX in residual with Slide de-fleeting fees sold and replacement pricing value inventory sequentially inventory for activity levels. vehicles the vehicle During residual in the used and target sales sales Both for prior vehicles volumes appendix to up rental proceeds down quarter inventory trucks although year. your end for Used vehicle and proceeds used at versus increased information. and value line current X,XXX estimate remain used purposes. lease estimates higher X,XXX reflect historical levels tractors remains above depreciation declined, provides our

earnings the retail benefited the on growth from Page more and vertical. Chain softer goods our percent than XXXX. from asset IFS in line increased quarter. benefited long-term the expected was the and by X.X% in comparisons the offset target operating Chain Year-over-year revenue volumes by Chain be charge quarter, packaged XX%, driven in of omnichannel is verticals with also Supply $XX to the in year. EBT year Supply Revenue segment's year. digits high consumer prior and single prior Supply for acquisitions. revenue Stronger recent XX. Cardinal million and acquisitions $XX performance automotive, industrial a million in in earnings a of primarily impairment Turning increased as to our automotive Operating full

related other as EBT single-digit of driver of continued X.X% XX. number and from increased and acquisition Cardinal primarily benefit reflecting as the of below Dedicated as reflecting Dedicated integration improves. revenue operating higher year, from Operating revenue conditions XX%, the Moving to integration open was related segment's fill to as the EBT EBT the quarter. on Dedicated and declined costs, a acquisition high positions Logistics. quarter in prior time for insurance favorable costs to well and target, reflecting in percent the acquisition costs. professional drivers Page

XX. Slide to Turning

capital First of lease reflecting of spending quarter above replacement was prior million $XXX lease and activity OEM deliveries. the planned slightly timing year,

runoff planned million $XX reflecting the of spending below lower For quarter, prior year, in the capital investments first was rental quarter.

For $X.X XXXX, of forecasting we're full from lease down year. spending year billion, prior

rental a modest $XXX our frontal our by reduced outlook forecast initially for upturn have expected. approximately capital revised to million than expenditure with We align XXXX more

be XXXX rental $XXX to million. approximately spending is now expected

be rental fleet, relatively average to trends. stable trucks rental, fleet In up benefited from At tractors XXXX versus Our increase is capital continue XXXX, of we spending down from demand approximately XXXX. year-end have expected rental as trucks pricing represented in and our to on XX% X%. XX% trucks

Our expenditures capital of just $X.X full forecast XXXX approximately is prior billion year. year below

expect approximately We approximately billion. are net Full be the elevated from million pricing year expected in $XXX sale approximately in to prior levels. vehicles down year used million proceeds $XXX from capital of XXXX XXXX, expenditures $X.X

negative range to for for $XXX is to operating cash Turning cash at flow $XXX billion, has forecast and million. $X.X million flow to full Slide year increased our free unchanged XX. XXXX forecast

cash strong, operating growth businesses, approximately XX% driven operating by comprise Dedicated our and remained Chain As of Ryder's in shown, Supply lease, which flow contractual revenue.

significantly lower and cash capital profile in growth spending from in our COVID has exit cash Our of the free U.K. effects and late lease targeted benefited higher also well Lower the as cash FMS resulted free the strategy balanced flow free of Proceeds flow. XXXX. in flow changed implementation as growth business delays OEM XXXX. since

cash positive on flow growth. prior right the In flow free expected investing to the the cash our at flow illustrates prior free capital range, be in side is cash to million although by midpoint expected free be in approximately is The business the the summary $XXX to of XXXX, to growth slide negative of investing $XXX million. fleet generated

return unchanged to to allocation supporting capital priorities and our capital on drive remain Our and focused are profitable strategy shareholders. long-term growth

continue to is priority invest in top organic Our to growth.

our been of leverage strengthen Supply strategic to contractual and acquisitions investments vertical helped growth, dividends. terms XXX% target to growth was accelerated Balance well below our Acquisitions Strategic capacity to capital in ample continues XXX% sheet at business repurchases share of mix. have well return capabilities Supply Chain key our and transform Chain to a through XXX% organic and to shareholders contributor Dedicated. rebalancing XXXX businesses, in to as provide expanding our as have as core year-end fund as to

With our back I'll over to that, outlook. Robert the discuss turn to XXXX call

Turning to Page XX.

in of used to $XX.XX full $XX.XX vehicle prior our increase We're year XXXX increased quarter conditions. and EPS on conditions rental to comparable from also end $XX.XX the for to is balance This stated forecast mid-teens raising first from low our year. sales market the our which during the of during our peak reflects to initiatives, forecast maintenance and market forecast return of low partially with line XXXX to $XX.XX. range weaker-than-expected equity We've trough conditions outperformance in cost our XX.X% of offset XX.X%, XXs by

Freight market conditions challenging. remain

of the we SCS secular vehicle conditions in that decisions, in and are and to believe to in second the causing some remain gradual used assumes in continue a half pickup trends sales conditions customers trough delay and We prospects XXXX this Uncertain but XXXX. confident market segment. long-term growth rental our in forecast reflect macro will

year forecast to the We're that continue a of to we've are quarter made drive the cycles to upturn. second $X.XX believe and continue changes cycle prior to comparable to that EPS relative a of that business We the positioned also to will all prior from benefit versus outperformance well providing segments transformative $X.XX $X.XX.

Slide to Turning XX.

in XXXX Most margin to used demand incremental capture businesses. In to also the we over generate supported operating managing continue the An of and retail changes. opportunities on from fleet activity change. a increase expecting each some on upturn. above prebuy cycle The on grow to engine late of relatively the network additional Improved of could upturn. on potential soon vehicle long-term contracts revenue industry pre-buy of cost our to as down expected of and have we for as horizon in and stable level cyclical In freight the the the sales. predictable exposure activity, technology our levels leverage maximize upfront we'll benefit generate In The ensuring from impact benefit proceeds sales, years we the of vehicle cycle is business vehicle and see resides fleet activity today, upturn given cyclical as the Management cycle, cycle growth used anticipated XXXX for is the and segment opportunity used ahead majority a that should FMS we intend prebuy through our cash maintenance as of historically by Based order rental, cost revenue that has in a Fleet seen expanded rental to gains the with to levels. couple business well sales higher to we the is is approach addition what implications. opportunity. to flows generally begin ahead the these EPA are focused normalized positioned conditions

demand to expect supported revenue Increased costs lease activity. would complexity and the would benefiting which sales lower favor growth. but decision, for been old driver and the outsourcing have used and sales recruiting generally emission are new engine also a vehicle pricing availability costs by Dedicated, benefit headwind In for We be turnover technology. earnings improved and

incremental As sales pain this to driver private the cycle opportunities availability fleets revenue growth more DTS and strengthens we challenging, address to solutions freight and becomes expect point. see seek as in improved

and omnichannel In earnings. been revenue supply vertical retail headwinds in chain, our weaker have to volumes

growth to expanded delivery of to prospects have bulky footprint support and and big this We fulfillment mile for goods the last our and long-term believe business. continue in e-commerce our

these for benefit to all appropriately business's We've outperformance X down recover volumes is pleased by results incremental this leveraged. services and business segments cycle supply during to been from footprint overall positioned the as cycle upturn. have expect We chain the the benefit and

higher cycle the of mix Turning have achieved during relative growth down Page strong cycle returns to to phase more and the the we prior and has Ryder returns downturns. XXXX with the come. the We value balanced during to XX. XXXX business up transformed significantly cycle, generated Since the is the resiliency each model. diversification of to our shareholders demonstrated delivering resulting highs higher our strategy, implementing generated of during

we XXXX, cycles, sales expected despite in to ROE to outperform rental. In prior vehicle continue trough conditions used expect and

opportunity significant investing initiatives. secular momentum We value for our in and continue will to remain committed shareholders. We from deliver supported expertise, by to capabilities profitable growth our ongoing technology see products, to operational our multiyear trends, customers and and that

learn team, and and our under can open. we York go New technologies expanded Day platform like half-day event showcase the are more business and such by required feature More information is Before questions, June to with I'd our to our optimization we're Investor planning and website. on chain now City, supply mark will solution everyone your registration about driving will on as growth. remind planning innovative services from in-person our that Ryder's freight so as please that leadership attendees Relations as well that Advanced leaders innovative and is a conclude We're technologies development in calendars. profitable be capabilities, found RyderShare presentations XX, Baton where a a Investor an luncheon can

so lot concludes note yourself expect to XX-Q today, prepared cover of file to We question. That we later had please limit remarks. a today. our one to that Please material our

in and queue get If we'll as can. many back additional you're take welcome to questions, the as have we you

to turn this over operator. At time, it I'll the

Sachs. And question Alliger from Instructions] first Jordan we'll take with our Goldman [Operator

bottoming recovery? if towards year. in as move the updated have expectation just used market. on curious we Just I'm truck sort midpoint of know the question at some the any I the of point be you on thoughts rental

have utilizations on and for bit than I would come -- at a the I the I now know your inflection? stabilized these And rental, would little you think too. it's then mean utilization mentioned But wait sort lower weaker thought. from do And seen you've was in of you just it that perspective

looking had Yes. at rental as I in think Jordan, X the the a cycle I long used now. longest as where this guess thing, trucks, downturn almost it's time, over we've we're well, years and far for

we to closer So than be certainly getting the end beginning. should the this, of

look seem production and bumping at rates We bottom. to are the -- rates come seen along spot spot X down. We've we Class be

So start get in the move more be improve. see to where balance. and freight balance things you That's to start vehicles of that freight usually to should to beginning

It in data point will, if we're really I pricing used declined was in improvement, think In double quarter, the Another digits. sequentially QX to from QX was decline our X%. truck level. an that to prior X% you

are some there. of beginnings some seeing So we stabilization maybe

you as rental, not confident mentioned, In we're yet. as

was the more we're We expectations in of think saw in certainly half. the first I not our We're demand recovery the than balance modest we quarter less expected. of rental bring we modest more demand year. what down a -- in for -- did the expecting second

that is lot think, we'd I done job a of there industry that by is pretty a but market these this little fleets, driven I good bit longer. demand may rightsize hasn't that, now, of the right to time the trucks like, has but obviously, way the one in back think rental take over an come not a only oversupply

we're that out, will, you if So pushing increase.

into balance the gone calculus of our year forecast. that's So for

take next with Research. now Wolfe Group our We will question from Scott Instructions] [Operator

I up just side. used So want the to on follow

a the now used is few in inventory highest years. So the

up still relative it's you that, a talk residual assumptions end now? are you So And in the to where clear, if price just maybe recovery half? can in getting not you we assuming don't still used you are back cushion stand -- right about the

Yes.

then of of balance quarter year that doesn't in the and then bottom uptick I'd the As the the call and fourth not the beat that I quarter, at would we that again that that right the would between bottom if see to that hitting why end the of going kind is the of in It's some balance that's call, range That's tell the we're on of and likely it you repeat kind for in -- given. really, assuming -- this what quarter. and bottom beat to happen, end we've rental first that pointed year. more said, the pickup third exactly the We last out be would the second happen. hard us has when you call, the we here around

of the that that's on asked you good obviously, business. about -- related the sort cushion, to rental. more we're feel but of as business intact. the parts seeing, of does, rest the where the and about the kind So -- the that's really contractual part how The the depending of the forecast just way of movement The for been has the business is in really UBS forecast we

at and follow of I coming up and are up. wanted QX yet just if really sequential growth some the the terminations leasing actually, So extensions end look you coming good there because at had are fleet to down

color how any from here? we and about So there should the think leasing fleet

increase there too, to Yes. fleet we in lot mean, Cardinal you if got because is I early on are organically, number. also redeployment. But which you some going look of you that But We're the organically, you're a page, that think seeing seeing terminations. -- if

those are we have in other pickup a the a of for not where bit vehicles So customers. do redeploy cycle there. to we into unusual That's

low we last at lot and a were remind other I terminations, you historically thing the had remember that of year, market. still where we -- of is tightness in levels the I'd

of the so more midpoint end expecting fleet X,XXX on of low to at high the our year growth think that rate, organic the in to look was about the X,XXX. at of that the to So were We're beginning now. X,XXX X,XXX growth yes, probably we would I

are a pressure we little of growth. bit the getting on So

meaningful ChoiceLease year-over-year -- pricing the but it's in the the we're you, of that to contributor I been Maintenance of a the improvements costs and quarter, only into continue we're in beat maintenance. would But improvement improvements still, because balance initiatives first year. expecting some our the or we're a and have the a that is tell not lease seeing, growth to the significant also from

our now I'll take JPMorgan. Ossenbeck Brian question from next with

follow to just line cost, on Robert, up maintenance big item. obviously, the a

and more a leverage are past. like that characterize Is a general. How of in that this getting deflation cyclical coming that? bit It's off down. on a pre-Cardinal of system, just more and things improvements continuation is -- little and integrating kind more a and would so focused been you capacity the it's easier You've the in there's structural that? lot are the of that of this Or costs in

Yes.

certainly think that We've about years. every year. working it's I we've the initiatives multiple been talked on for

have $XXX We the initiatives. had got then year, that million And $XX since we -- million, of $XX call every multi-year initiative. we've it, million

those. we're getting or mentioned, that's outperforming So costs. around those some of we're us. on And some Plus disinflation inflation, some less as helping of you also

continue So those through likely are to those are are structural. of the -- I think Those certainly balance the year.

people of side. And and though rate through market overcapacity. leasing talk rental just then the on from lease you and the if leading maybe you side, on thing rational helpful. same quite to bit a finding A market? pushing Okay. do a be staying bit That's year, helpful if coming out that's you're a right grow How you mentioned this indicator book on would still was solutions of And a for are see add pricing their how in where then little just lower. just people bit rest the through terms disciplined to or for hasn't the even utilization can now, spot perspective in who recovered those want

pretty that certainly pricing. all to previous kind out equipment, out pressure well and kind rental, in of cycles, was been on with manage of On well holding we're pretty a and That there There's we've rental able still good flattish the excess Yes. some we're here. question. -- we've

a as bit to a as Around -- wanting not fleet lease, certainly year X little or customers ago. they whether certainly, more much you were they're see adding hesitation,

expect of softness to But still I have X,XXX growth of within mentioned, little a as bit there. we're So seeing X,XXX. target our I to

pricing, signed day, the you have at And truck don't end is the good until about a of that lease lease. you buy a the thing the

staying within and able that that we've are points. about pricing talked of still discipline we to XXX, basis XXX target So spread range maintain the our

We'll from with now Vertical next question Kauffman our Research Jeff take Partners.

a XX,XXX, but does and now, your kind on dead I And somewhere of figure think lease in to the X% include that XXX,XXX to leave take right beat XX,XXX rentals, between heard, about to Cardinal. rental numbers lease. about Not year-end how if in fleet I year end lease horse, I'm X,XXX down units. the units, of where out us trying based fleet? And the but And X,XXX, does that so on to what I've guess

kind we're And attached that creating trucks trailers, and on deemphasizing we're in a that, shift mix is tractors, to reported the little on a RPU? negative of and then more just as bit focusing

let that yes, I got We if on from just X,XXX, you the Cardinal. you've side, -- were including the originally Well, will, right. about me XX,XXX, think lease

right can assuming the could early. But It's a year the we're be should So probably the -- to the balance that's that you the were It's to X,XXX got of beat the XX,XXX kind of happen in that. what aligned be for that added we to little that. to XX,XXX going for now, We're us balance -- year, forecast. we to XX,XXX, still lot we going of range. be a

second In question? the half terms your of was of RPU? what the pricing,

decent. I component changing. drag Yes, just like the more actually on was mix lease of pretty have inspected a bit is looks negative it the RPU based how a little would

see kind help that. me through So of

Yes.

coming Remember, in. much shift as is trucks the in certainly big rental, though newer not Some the in lease. of to equipment is that

has been on to on more we've the versus the lease tractors the shift straight making less fleet. rental So fleet, been so trucks

to clarify All your right. just And comments.

terms year of for the units? the this of fleet think the total of I should remainder lease as being around in So level

Well, unit and to this we've up, level, -- added right? added So there. we're move from the X,XXX to call Cardinal up it's be the it, X,XXX we've going from then units expecting to

So we'll XXX,XXX. get about

We'll Justin Long from take with our next question Stephens.

wanted Chain recent Dedicated both I the ask in backlogs. about and to Supply the trend

have year? what you the about to year-to-date Just headwinds. you tailwinds, curious you has Robert, of made also were secular how trended last pipeline relative activity but point cyclical the seeing

businesses. for pipeline netting So I'm in how just curious that's of terms out the those

forecast, a the in as seeing it on cyclical tell mentioned are in -- are updates We're pretty earlier in pipeline. I Steve attractive. from our you, just let some Yes, we rental headwinds just spot flattish. to some I'll I be -- lot Dedicated, we expecting certainly give mean, rates you

to trying is those. soft. Availability of take drivers customers seeing You're of advantage pretty

of So companies to struggling they -- you're couple drivers. a able aren't just find were as to years ago

We So confident -- but that happens the It is feel cycle. that not come unusual. will back. during

more supply the I delaying We're the think around Around customers it's in decisions. been economy. uncertainty seeing chain,

coming think, economically cyclical you'll back. So again, I'll of so also see some let -- that's that and I and

give don't color Steve, around... you But why some

Yes.

Justin, I'll Chain. with Supply start

I flat think said, pipeline was relatively you in Robert months. X Typically, about delays as the look year-over-year, it at continued if we're just decisions.

more Lately, opportunities months or so X Now that seen extend we're now. right holding have we plus. seeing delayed postponing either decisions

really year. for I it's these the economic think the in a So outlook making an later year customers, network maybe for change

And Dedicated, get we a pipeline then pop did the on in year-over-year.

there, campaign marketing is other of balance the of initiatives. story acquisition. comes service the side. now over Cardinal advantage that delayed on from But people Some decisions, our taking price right the kind Dedicated Same of from

follow-up Group Research. from Wolfe Scott take a with now We'll

talk you Where it biggest the to see that there expect started fleet pricing benefit? Is next rental? and -- about ultimately to long to since any Is gains? a big growth? you leasing you've it prebuy do more you the coming is Is a prebuy. had been year. It's Where benefit some benefit? time point So used at maybe do

Yes.

yes the of all answer those. think I is to

myself. to If you date go back to -- starting

it ago, so this back increases of significant of and that impacted, prebuy, years in kind lot there lease 'XX you all, of change in benefits. late a prebuy, to one first the -- similar lot a cost technology that it just of 'XX. XX go you basically, a to and see in And of with operational less because was If level was We XXXX, 'XX level allows at-bats. have more did it

gives I've our got making opportunity sales Do I to fleet. got replace do? lease market. to decisions it You win buy additional lease? It my do companies I some on, to or What

vehicles, goes the lease helps the in of and to vehicles that our in are years. as rent are are waiting pre-'XX business for for opportunity rental new up, rental an also rental as they're out because certainly It customers to they attractiveness that going those

but back above stretch used for they're used be the then of vehicles the And that vehicle those 'XX. The that a significant should fact sales residual the helped XXXX, by significantly the the into pre-used in market go sold, to the on the for residual, price 'XX XXXX when at out values residual multiple we vehicles those will side, -- -- were and the time and they pre-XXXX. If our back I used certainly, significantly that years. that sold we vehicles, not come -- truck

I So to that expect happen of again would cycle. this through some

in reporting thoughts you for truck maybe the That's the just saying what bigger are gap going trucking it what Robert. and saying And fundamentals disconnect? think forward? between do truck there's And and reporting. and on right, perspective, helpful, what pricing are your other makers your this huge means you're companies new Maybe this picture

Yes.

-- carriers. think in right? rates, to the the it of boils book I it in business our business bottom, the We bumping significant rates spot to the -- management manage not I again, down larger rates we're and very and truckload boils for truckload our Chain customers truckload painful especially think transportation along but a business, recovered. not down have for truckload pretty still They're Supply spot

It's is usual if the of happens. darkest matter a know because probably that -- getting business that's think we're getting just just But is back it's of up. It think come will yet. I had when It's out supply haven't there. enough I -- I part the that of we owner smaller dawn, operators the but before this don't cyclical.

a Now large of in a off come OEMs significant the backlog. the period meantime, of pretty have

they backlog feel We're come come where now I of all for good think production part has seeing this lead think kind pretty that were. the cycle, that are in through from and it. the down. definitely times managing OEMs we of about have vehicles And the I

they -- significant they 'XX see their think late looking increase are that for business. the should for and at they're I and that our is good seeing in all certainly are looking So and prebuy industry 'XX, for

Brian We a take JPMorgan. follow-up with will now from Ossenbeck

in of omnichannel if you want helpful the SCS about the Just rebound wanted would being maybe the and the in broaden but as slow well. end half, particularly some to talked a trends comments past, bit you're be for a perhaps you've And second markets your in half. on first out, to get seeing, that the first quarter,

see the activity half auto terms in verticals back you ramping pretty So as the into not up and year? of strong. into next the is What rest about or them of

demand pretty Again, some But going can. there's and omnichannel, best improvement let we can the the the as give also cost structure We're Steve certainly rightsize to you looking adjust soft. I'll the We're things color we business there. an trying on, in e-commerce there, still right? on X where for to

have half. the So at we're the strong. parts some certainly still in you looking second for growing that benefit the But to the was of for business, the results if pretty looked quarter other

give Steve, But more why don't a color? you little

Brian, continued the automotive in industrial. seeing we're volume Yes, sector and

an there. cross-sell of the outlooks acquisition and pretty IFS, CPG certainly, that's with area core customers. I to we need So to decent CPG, our think, upsell that

volume play. as said, a it's think, I really And in Robert omnichannel,

If mile and the business e-com last about business. the you think

we're So turns that ready back when economy the to business. sell go around,

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

Okay. Thank you.

York Day. as Investor just reminder, Well, is our June final a XX in New

look a at is, Ryder all of forward. not things going thorough our to and outlook of this review but year, you and hope to just certainly I forward more for the see what on So all giving you good there going

conclude all participation. once again, that thank does you And your conference. for today's We

may You disconnect. now