Old Dominion Freight Line (ODFL) 26 Jul 182018 Q2 Earnings call transcript

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Good morning and welcome to the Second Quarter 2018 Conference Call for Old Dominion Freight Line. Today's call is being recorded and will be available for replay beginning today and through August 3 by dialing 719-457-0820. The replay passcode is 5482061. be August also company's at may website. replay accessed XX through the The may within including forward-looking the conference financial contain This call performance. statements regarding Dominion's Litigation Act and operating others, Private Reform the of among XXXX, statements Old expected Securities of meaning

any intended during believes, limiting Without are this similar identify of the that words statements plans, this the are expects, expressions statements. purpose, For fact, be may forward-looking call forward-looking statements. not anticipates, and historical to be statements made deemed to foregoing,

hereby in the cautioned release update statements. news obligation with and set of otherwise. operations undertakes no Old any company that affected You're Commission publicly new these statements the or morning's filings important forth and forward-looking as and be differ information, results results may a may consequently Dominion's to the by The statements, Exchange materially forward-looking whether this from others, Securities actual and events factors, result future among in in discussed the

your As limit a I'd in to that returning Chairman, a conference you this Thank we for opening sir. Congdon. Please remarks, David before At Mr. the to all, for the welcome like queue. fairness time, the a turn to note but you begin, questions Executive time to cooperation. today, your to of over questions company's ask, just go ahead, couple at before yourselves final we

shipments ratio in for with profitable quarter Old to quarter and our welcome brief metrics a questions. We CFO. conference our our today a second claim the And outstanding, which exceptional. of service remain cargo and revenue Even With Dominion's your in our XX% on-time of glad quarter financial second growth growth XX% to and take delivery with we'll for Greg double-digit and in Satterfield, were increase President our our be X.X%. remarks, Good substantial growth balanced employees, strong, produced third consecutive Adam morning quarter. Gantt, call. the are CEO; results me after drove of

no in We delivering stronger business economy, on operating of positive U.S. second for about XX.X%. indicators, by half environment. Based strong the were leverage a build supports further encouraging on very nearly have in to from trends ongoing new increasing operating received terms record for our believe of of recognize for Old all-time carriers and experienced economic conditions In the with their also Feedback The momentum first Pricing positive third into favorable growth along also industry need that their achieve to Dominion is all support doubt ground in able we that ratio the continues the and customers metrics their broke quarter, we capital XXXX. capacity-constrained environment the to that an in quarter, in far quarter. expenditures. demand across operating be remains increasingly also reflected businesses services. where attractive our remains are margins second the thus our expansion we to profitable of an we

positive and XXXX we of half beyond. first environment, in second As continuing into are a result and half our position the market strong performance of our confident the moving macroeconomic

to President management responsibilities results in In transition new team the quarterly combined our CEO, and our well. the his embraced planned within and Greg addition, expected, executive of gone as has and has very is role Thank quarter management his interest entire your that of now in leadership more for discuss Old Dominion, here themselves. speak Greg and our team detail. second the and for under in certainly you

and the a everyone of day to power the basic the business for density increasing commitment yield so to in effort fair XX%. of at case operating provide OD for the quarters good show innovation, the The work enables late I results Old operating leverage growth and their significant flexibility, all. by recognize value is service our of now last drive employees tremendous effort the help exceeds David, second that again statistics year our price. the formula of and this them service and of study freight each model. morning has to our family to don't for model once particularly revenue financial thank superior September the employees in a impressive delivering to last are over and been three Thanks, our results proposition for and What our claims-free of Dominion's as well. quarter The quarter. in per want surged our on-time,

time growth LTL acceleration demand superior quarters a three digit be for their rates and have these free. double to shippers of gains and the day believe high past that in which range an enables over among new on freight inherent been will has customers existing per as the shipments in claims in growth share Our our in We reflect service, confidence delivered market well. the degree

new to long-term long-term. service as especially to will achieve require strategic prepare company these employees our maintain new workforce and cargo not that results the the second in goals increased to strong look critical were performance. each the long-term over growth. added in claims our on we've our believe previous to we nearly members goals a year, has total past We for added steadily as have of been share of of retain of over discussed are We produce is with David allowed you the As rely the on-time Of it execution almost can easy consistent that growth. this attract quarters, long culture both the third anticipated shipment mentioned, consistency plan. to XXXX. of to make and employees, us this that adding team may our we market double-digit our our tell of our the who quarter reaching within I Working X,XXX to and new tenured

our P&D overall productivity second and the our very dock improved, average operations remain some evidenced line Although operating operations by our as haul we load to compared and of as efficient have and laid quarter ratio. year, our last actually lost in

While will also deliver be our LTL to clearly this our industry customers also we meeting successful the strategy, as expenditures to which key our that our ensure our one priority confident performance. we will time. to to am through service always contributors support designed superior proposition that and as continue capital the we second customers, capacity promises in to have productivity our people the is share. level philosophy Old in all our Dominion historically our to financial quarter, maintaining service the just superior lost pricing the number regain philosophy; the This nature our of of expenditure our I our and and on to In due continued market also winning and commitments long-term while are differentiate value

have Old our that we nature pricing service often the philosophy. We All industry are told of and to performance. Dominion you as contributors positioned clearly key uniquely is successful as historically believe LTL in financial superior just the our long-term

our LTL this of statement. and our uniquely believe market that Old share. think operating results should told half quarter that also add and the the second in positioned is you the to expanding financial for industry support first have to XXXX we continue Dominion We We further

for in execution market Thanks growth share while favorable our place and we for on Dominion to increasing in ongoing shareholder have being Old business believe us this our that positioned remain Old also dynamics growth industry also value. interest of opportunities that With is to We your continue. we remain uniquely morning capitalize strategies, confident the for Dominion. for with

Now, in review to greater here's our quarter second Adam numbers detail.

Greg, with good respect one and records company to new the industry you, the morning. many second our set operating Thank quarter for Old Dominion perhaps during ratio.

increases XX% that economy capacity a both benefited the which $X.XX. industry. from X.X% lower and the improved when $X of grew by operating per our share to operating the revenue volumes our to also excluding XX.X%. a increased rate combination the before general achieved hundredweight X.X% surcharges. supported The and fuel yield, the to in growth quarter, ratio LTL these we were and increase of Our factors ratio. diluted for quarter LTL effective within us have is increased Earnings tax and first both included sub-XX% allowed by transportation billion, income tax XX.X%, strength and of in per Revenue XX.X% revenue domestic which tightness increased second to ever

quarter the sequential which the compared increased per Our a shipment per the XXXX increasing LTL sequential tons is-in average first LTL LTL tons weight On per average of to second of XX.X% with shipments LTL as per compared X.X% quarter this increase XX-year change day with for XX.X% metric. a X.X%. to increased XX-year as day second X.X%, increased X.X%. line over LTL day and quarter basis, sequential increasing XXXX of shipments

Our growth strong. remained LTL shipment

per of XX.X% weight per items in July LTL note in shipment The as quarter LTL decrease during an trend accounts that percent depreciation as revenue improved our the good between during that revenue due more The Month-to-date we top in percent include cost, shipment as Our quality and of as basis growth day as operating continues LTL same decreased XX shipment to to Overhead-related that direct increase of the the tonnage heavy-weighted costs July general that was XX%. to volumes to expenses per supplies but both of in of benefits yield our in per our weight In as increase Dominion's weight second other revenue growth to up the prevent support quarter the cash interpreted XXXX, accounts In direct the news we operating basis cost taking diesel I basis per in revenue. compared half shipments XX%. million improvement changes quarter. $XXX.X million had XXX improved freight our mix that belief, expenditures shipment and an points in Capital increase in second as second on day economy. average operations this of of XXX be of of the the as result, second revenue, rising respectively. due per million salaries, as percent impact from improved of approximately of quarter expenses of the just products. weight notably customer and this focus million compared XXXX, currently reflects the overhead XXXX and of costs mentioned our day our range for expenses we with July to in when half should Convergence strength, the much and cost. for second per a for in based basis our show petroleum-based with on have XX for and points totaled well a too our to LTL operating first quarter were supplies first a other and an controlling and ratio $XXX.X as the our is the XXX had capacity. weight a that same initiatives well and our taken XXX a from is on operating XX% note but and shipment XXXX. I changes read negative for wages points, fuel not the points the those slightly flow quarter. $XXX.X believe quarter and for $XXX.X increased and trending

of projects. million. to We of half quarter, of shares share estate Total $XX.X year, the certain for subject to approximately million paid returned the XXXX repurchased timing of expect dividends first of for $XX.X the million to continue the capital total $XXX expenditures and shareholders repurchases. during of $XX.X was amount second including real million capital We

us the effective compared the Jobs We're was currently quarter Operator, Our to positive and anticipating effective for of however second Tax time. XXXX, of for This third any note your that rate addressing places prepared this the Thanks. our for the stumbles in floor as please quarter for so in primarily I start XX.X% second as XX.X% of tax this remarks quarter. this questions. annual we we're at to morning, be rate happy the morning. of tax we'll an XX.X% concludes forgive different will questions due impact Cut to the Act. XXXX open

Thank to first Shanker you. Morgan Stanley. we'll Ravi with And go

Good morning, everyone.

kind in what kind of So, of that? you more broader is e-commerce? weight per the elaborate it decrease the that shipment Adam, shift driving and deliberate freight? a that of help can there? mix Is what's Is trend the on – Is

Not necessarily deliberate a shift.

up significantly, certain with we've so we're growing we got growing in think I what accounts like is XX customers, seeing I and that and maybe our are top a certain were different certain significantly in may that distribution just serving. picking revenues freight account, mentioned customers, different mix cases. we're But in the it states that centers of be we're it's different and same

that that some of So, also very to we initiatives LTL freight We've were sure we seeing we're element places that's weighted to our make to pricing sure continuing that one certain certain that made scale the seeing. have with change freight too and and so the much we're of We want changes prevent not and capacity. heavy-weighted to taking make in been intentional. some to handle a up small significant truckload items don't of has items that

from that? it. the then it picking that your the share fact and to share, whole it have coming coming sense within from modalities or different from? as brokers overall from share you of coming mom-and-pops? Got it move the coming growth carriers? up of more to it pivoting Is as comments coming competitors? Do your picking Is from And just is your is kind shippers a where on asset-based Is LTL you're transportation bigger up a

a see are type we so than that to growth for your the growing company about will faster different XX% you Code that industry, in modes quarter, talked seeing is row, seeing may hit we've as for us. believe that, on the fact that about to little we are the saw our we're good also of we've more overnight secular into the the starting nice own as will what and long-term a seeing It's be that shift customers. the yes. on growth good from if in attribute with with all coming of we're from our from that look XX% they're about we've that not across recent of on I coming and in and of this, obviously Midwest overall been first well our growth cylinders there of to a that Midwest answer which and growth at seriously, country we're capitalizing But, – bit happening retail, I certain transportation seeing economy. above. some growth in think second industrial a firing economy, average. reflects certainly of growth the is it now. we've our the short quarter freight that be the it's of that LTL the though add think to and seeing consistent areas all really all industrial the going improvement Each little customers, respect no, with all a And to adding we areas believe certainly seeing regions we're you been change, It's the or but we we're the quarters. something hearing And most well. of bit capacity, question, that retail-oriented good seen growth customers numbers an something SIC second we macroeconomic that have and numbers of When with of – in an The seeing example I

just, And does given be lastly, kind it. macro kind a the strength Got of dislocation sustainable of something, some or tariff or kind to it of while. current of recession the for trade appear barring or environment,

in timing GRIs size strategy your of to to are or revisit of relative the kind GRIs planning pricing terms the your So you of peers? the of

Well, as obviously so the demands reinvestments out the the our has philosophy to our key beginning and achieve was been the run; we particularly customers to make of on customer-by-customer each on It our that designed a long-term I in as offset the results cost business, our company place, compares profitability a at a the the to had prior shipments to June, think year. the increases very to supporting need that estate to have is of and had real long has company, well basis over well one, in as effective that technology individual in increase at worked September, that's, have well pricing as that and the as we just we've beginning the we pricing us. face GRI customer to side cost that for that handling

you. Thank Great.

you. Thank

We'll with Bank. go next Deutsche to Amit Mehrotra

Thank when really basis XX on that Thanks, solid the you, under Adam, operator. for I results. you congrats the not sequential a everybody, or historically points from and XQ it's see at step-up the look but to in OR several years. XQ, last significant, move do

results margins strong XQ. like XX% if acceleration something So, guess, the to third over implied It XQ quarter. you very there's I in the as that an like incremental in holds, from move in looks trend

it the help Because back volumes comps, half up are assume year, some right and that I backdrop? would about of slowing think just is acceleration if also, argue, us coming to So trend that? pricing the obviously different the could you incrementals given in and against

we Yeah. incremental in benefit; the way. range that don't and on XX% show but we've well continue with wages our we and probably to which you to talk produced to the in achieved as what XX% cost the and that direct continue Obviously, and growth we we've when to apart cost kind talked quality between margins. get look we company pull the manage power about at shows target. operating revenue that's here obviously our overhead. and the XX%, still overhead good operating and We'll and our necessarily use direct about able we at the somewhat operating expenses. repeat is Certainly, of operating our to in we'll our quarter approaches said Well, of breakdown this we'll tremendous what we improvement model is say our it looks ratio what when salary, ratio quarter second the that But until cost leverage that long-term, strong in supplies we're

we've on quarters per improving consistent is we focus continue that improvements, that can economy we're XX% and if have for what on little a quality above and show get as those around incremental quarters on north I demand costs to revenue much macro got costs, and we'll give into hear don't where we're the bringing focused being accelerated certainly done those So each certain there, every as range based those and we we tremendous it's to se, day, the we've that's to with continue the dollars then quarter can line. revenue certainly to opportunity but those guidance XX% or customer on company, to we an growth got where and And we revenue been that. bottom growth think of showing grow we've the focused putting that of a

Great.

you've so closer shipment talked X% that I And mean, I about that, operating of if kind to X% kind And a the half been follow-on first range. about OpEx – that historically, of just X% to X.X% expenses think to to in talking range. leverage. it's per I

the this is ability an there X% or to level mean, number maybe X% for of I further I per to kind you to is, X.X% year get is OpEx and is – the right leverage that of As more but to mean, down target? grows, kind the business I shipment can there guess

first X% had And on product range. of as we're have that's increase a seeing some operating quarter. as second X% prices the and closer a if our challenges recall the cost us quarter, of is petroleum-based you little put and increase revenue not cost fuel things. that in in and driving but increasing in It's quarter-over-quarter we're of as we these other we element, basis. productivity Well, increased to costs move one acceleration we out, that significantly. in in bit seeing did that some the then well, which fuel that well benefit had And back saw fuel in more we the just the What supplies percent if you is only expenses a

we've So, got improving that's continue to well. going focus to and opportunities one I there element. as think we're productivity Certainly, on

Great.

very Those Appreciate much. Okay. two. are you it. my Thank

Thanks.

go to Inc. Stephens, We'll Brad with next Delco

Greg, morning. Adam, good David,

Good morning.

Hey, Brad.

Maybe for Greg.

or shipments – sequentially, increased Looking X.X% X.X%.

Adam, so I did lost Greg, employee we better your lot mentioned you of to increased shipment bit little think you're are get that's And X.X%, on your count about think, going good you maybe the and with or some improvement growth? historical on said a labor the that productivity. of challenges you Like workforce. the exactly you improved and forward than count areas some relative leverage dock employee force? how expected your what for averages, labor productivity having do those a

haul you Well, Brad, on have particularly you we little will. obviously, in and see, the we workforce, Okay. were and a to a added of P&D long our as folks behind, can lot platform But the if operations.

as had With the hiring we've where do to been our fortunately we that. happy we that add able the I'm needed, surging growth and efforts, that to were to we've ramp and needed had, able to up force obviously so

need in of I a I peak a the don't month We've feel to good quite a with, Going think we've through deal been months, folks up. had but past, second we much months that closer peak in we are. June. got we're that had. forward, quarter couple number so we of the at end I about the couple desired big went see the peaks than got yet need But to of We where we've the coming of two

still from much we I be think needs, have locations some hirings through those a the we but quarter. see less you'll what in quite will forward. did bit where here level second There some out some than

Okay.

the of I in-line trend more is with shipments in thought guess the sequential sort here? So

Brad. Yes, Yes.

get to an for on dock tenured to really it's learn months delivering and that OD David nine trailers time speed to fully up really Brad, a packing the delivery, at technology claim-free I'd takes freight timeframe the venture to least moving side to our it that and learn of a of add, employee. to our full systems, it comes of six productivity. with really – the to takes a and months is I'd reach six way like level employee this – it

that So hour a this XXX nearly and productivity in with going pounds terms well. to little hour back a all the the of we've it's just X,XXX, added, primarily these get some recent should our the of both nearly while. dock, be in most to per quarter, P&D per take folks in We lost third – as able shipments of but

Okay. That's helpful.

So, you room issues averages us running second needing historical or do just now capacity averages can sort maybe the sort and ramp. question, good of you Are of And optimize trailers? in seen you and new context. really, load versus assets, have them you've the are to them freight employees about to the productivity think just your thinking the give extent with are incremental load then your sort a the where of as to as still your these

of do room, in a day, Brad. recall. area. I I yes, they're There's have me if numbers When improvements talk X,XXX to past. that you I'm near that in always but, closes to for some X,XXX fairly better improvement much peaks, close and pretty think our looking of But There's opportunity absolutely. front about at right we they're those in quarters not some our historical in area. the make always room

time. the Okay. thanks it congrats guys, Well, good on and I quarter. for the appreciate

Brad. Thanks,

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

Hey. Thanks. morning, Good guys.

(XX:XX:XX)

July I comment then same quarter, it's implies normal you And the right. then, maybe can tonnage tracking the trends seasonality? sequential us revenue just yields on in is up Adam, as just you and want I give of then the that growth. confirm double-digit how that so guess to that's and that monthly saw second in So, sort July

right. That's

we've we the On with and weight close per per X% saw in well on high reported per hundredweight. negative effect the increase had facing June, as revenue a shipment in weight as that's as side or certainly our this X%s the yield been shipment;

So don't shipment a and have yield negative as now same we're more becoming is as result. a normalized, little that per the pressure you weight type getting of more

over was X.X%; that tons, April the X.X% average May and for up X.X% May sequential to X.X%; and X.X%. March; the changes up compares the for quarter, up over and June April of XX-year X.X% over On was was April, June second May

wait. was shipment the that – On

the timing April April June That up shipments, XX-year little and a was and the we that Friday of with seeing year, versus We're had X.X%; increasing there, see in of shipments May that May. tremendous we're still compares versus shipment Good up trends On increasing increasing X.X% which the over of to different size. and May the we're throughput the up but May average were the X.X%. X.X% was X.X%. little this getting you up the June And just in and last getting X.X% that June, metric can average, increase is was just XX-year April a shipments; X.X% recall bit X.X%; decrease

yet? full month talk And can really can't it's about it a and you you talk sequential for July not or because

trending I'll a that XX%. count shipments that year-over-year is about And not then, up. the we basically what the this the month of weight full what with point, pretty are we you at That's June. tell and saw consistent shipment around but growth it's talked Well, May is on in somewhere

that now, more bit I weight right shipment from decrease see, the in-line much but actions weight with sequentials of and taken. we of in normally into as is June a little side have just is pretty that So mentioned and the that result is July some per might intentional on we shipment the before, than we're what seeing

the do think that sub-XX% years? a OR you place for Can And my of when Do a full can quarter in maybe you couple realistic? That's next that's you a you question, do that year last that's Okay. then you just helpful. do? think sub-XX% do a

happens. see we'll guess what I

used since see mentor revenue guidance. former about model my we've each – we of you As that give quarter to that the the doing. when going seen growth. the But We've XX% had power talk incremental above-normal of and we XXXX since margins, at second averaged year, time I we've to say, back don't think what quarter is can last

taking we're density model we've that leverage the advantage we yield. our talked capacity. we as about performance get continue two in in the these – operating certainly so And ingredients margin revenue the key of are investments strength They're long multiyear in through, and coming made long-term and that to that's the

And so We're extremely we're certainly require and of support see the from increases And positive environment. be customers to read getting both continues getting macro yield we the the strong. density. continues our we The and certainly be to very need positive. that everything environment

or – that Scott, add what like have, quarter of the mix have I'd second and are the had that growing a rock is network have, of shippers we in across growing pricing customers we notion reached the peak just I – the to a our there's strong sales, to of the most within just recent We and business career implies this going solid measure best production, it keep of out it's look and retail When philosophy everyone's nearly there know The is just, solid now to you this. mean, spending, we I economic One fact in ratios, don't hell But to future. of shipment levels the it. that's see every certainly, right inventory call we – got forward individual a remember some a days out multiple with do there carry the be shippers you is things. macro but I we've don't industrial density we is go customer we lot shipments the of account. I every base from sales everything's pricing can David, to and we're with we good, – each construction the a – in it's growing to growth for indicator kind my something, just as believe and rock that those going you is economy name multiple that across a balanced right good this ISM, now. GDP, economy is

leading and the solid. seeing trucking that putting weakness, rock economy is indicator I when now, been you is think of if out an we're has any tonnage right index at just not look a (XX:XX:XX)

economy notion now Dominion. right seeing not no peak to to peak and it's industry, strong comes So the notion it the certainly of entire of when continues we're Old and be in just any

any to be We the proven any stars better growth for being Old not history cycle. profitable aligned future now, at able economic have way a power But our right of Dominion. could through

Thank the Appreciate time and color. Okay. you.

with Reustle Matt Goldman to next Sachs. go We'll

question. thanks to CapEx I a morning, bit. just taking for on good touch wanted the Hey,

maintained you budget you also pretty the for in there. terms But shaping XXXX, macro how comments of do right on when in XXXX. up see to capacity, that current spend But XXXX? looking the You look at backdrop out strong

scale. thus We on what should more we somewhere spending revenue our opening soon a up future We've that availability, to that end long-term service year grow to with and we're execute adding to got three company of if the total been and piece We've end from a our expenditures. XX% in probably to been of be based plans year think on to doing be haven't would find think those on today we've that to this centers estate opened least continuing and to the in year. historically we another several got may network. plan continue see, we capacity we average, what formulated we on on centers, strategically. real jump a can where the the intend XX% and plan our standpoint we capacity XX the at what a certainly, we're – the And We XX certainly capital low think going of budget XX% real that has CapEx this standpoint. important We've maybe most started within of far to estate it's of to our on the in and We're will from and opening XXX. range, XX XX% up

Okay, thank you.

that to Greg. this is – add to Just

purchases in We lot property a have that cost construction XXXX of should XXXX. become in

expect see where it We be but to and we'll it have shakes out. to similar wait

Sure.

about longer-term a That's getting set And or share share, thinking that timeline obviously we this on on longer-term here, target it on little you're Okay. you've in one goals guidance up think yourself But year and like any as a share. gains for market in what helpful. bit picking seems should market there? overall big

We this our haven't is. terms point of in target next put long-term what anything out at

our particular, One, and for and the we're long-term long-term. our range, growth opportunities. anyone that's share somewhere going suited like the the is industry, the we're XX.X% transportation about capture based from think forward, is of we're than within positioned certainly share probably industry I and that a over think good feel growth better to market I intention that best XX% our what we've standpoint, how revenue executed I really in we in to where but feel trending on LTL

We've and better about – any we to continuing the necessarily day metric of give that at think get good So, a of we continue grow see don't the to capacity our ever-increasing to that We're demand fair to we and we superior able price stock. our standpoint – to to and in demand got type be service. service only can customers. that adding feel the we're network meet every

peak. We of have no notion

it. Okay. All right. very you Thank Appreciate much.

next go with We'll Fowler Todd KeyBanc Markets. Capital to

Good thanks. Hi, Great. morning, everyone.

conversation of to the you that saw to about you per perspective that most something Do benefit the was is that be? timing? shipment, those can the move you're profitability focused that talk to you continue to you the or relative margin that of a profile Just come think of your And is year? through quarter second shipments where in some based of just should – of the on weight would something the that the you around as from rest build kind to the back understanding of that margin that's looking that want on, at

many capacity our was their large to say, these from – bog we've LTL we've demand shipments large truckloads has into an what shipments – network quote-type into had customers it Todd, falloff is down mean, and large increasing with our I of freight. been up definitely more LTL bog more some shippers I'll with spot full of not there breaking because very handle such shipments too truckload and careful of LTL our to been LTL

has we per raised we intentionally focus discourage have shipment. we LTL for our that quote-type, large to And to was weight on shipment shippers that per so smaller that right, flattening to contributed LTL weight order capacity in refer have our so of spot that the what would quote, and the our pricing it spot on

it. Got

that quarter makes just, then That good inefficiencies you'd it moving worked that second I understand get that. as I Thanks move maybe wouldn't during with recurring just for would was the margin And is that favor your from fuel or some you hires, it the productivity, perfect on productivity Okay. and quarter? a you the leverage some up a that of not in the expect, be sense. about the the into third sequentially some of new call there for second cost mean full the and cost standpoint, help was that anything side, Adam, was the situation out there we cost you quarter a as maybe quarter think or did where were

we in somewhere was. And costs more of a quarter anticipated I I think last I the in-line with talked comment part made overall of was the had we change items seen little into as of seemed lot kind little here XXX-basis-point bit that we slight cost. we about weren't I that to continue normal. first forward, given first that we wages, basically salaries think numbers the go that see quarter improved going One a and year, it's it the some improvement for salaries performance we as normalized rate. positive first bit a a we've favorable a increases of and we did the with same quarter in reason But what little bit as had the some expect on we've things wages, the in quarter more which had call some sequentially standpoint, year I talked that good bit had approximately the employees quarter But that a really that as benefit and material a have claims we of compensation would with that what lower. of but being call But miscellaneous like it's think little XXXX. respect higher call more a that changes full expected dropped perhaps with workers' was health was well. as just our But overall. we there's there, increases XX% otherwise and the from to than with than out anticipated really second quarter we that but quarter thing sequential from what the out, good was the quarter, to couple XX% compared of a second a than in a our and is little we they just better so stronger benefit were those vacation came around other well what a well; to that year really to It's nothing the have this little material in trends for that overall the comp benefit whereas performance, cost as bit of and last anticipated, than our around of those performance-based it cost little first improvement with we higher in-line expenses, bit quarters well a for

Good.

seeing sense makes one and XQ Yeah. here that that helps. Okay. remember from That into XQ I reverse sequentially.

time morning, okay, lot So, the a guys. for this thanks

Todd. Thanks,

We'll go Citi. Wetherbee with next to Chris

wanted yield. I a the to little on touch bit breaking down

I think are comps? You sort year that, July. a against how Adam, in see the you of into stronger think, sort and context? yields as of things the revenue that been running in without want getting the couple kind go quarters. pricing continue get Do in double-digit of just you of about I range mentioned It's do last sense you this to that per back half that relatively trend to neutral hundredweight fuel the of accelerating

environment. and intention the Certainly, is improve we have yields our to this every

when in for can't the producing that in of we quarter. our what with June but it GRI up will If certainly you beginning through get than put accounts. improve, We our increase addressing that second had ended the what you helped a know May metric quarter-to-date been mid-quarter update number now, don't we I reported from get we've an and underperforming

that revenue performance performance continues of strong, the it's all is revenue in can just you fuel. July day, fuel now, some and as not what accounts, the per yield overall normalized, increasing. fuel is the is how shipment to per and into is weight of initiative right kind of and about taken. back address be that this per earlier, where per mentioned last very weight a mentioned year, we've to same with shipment With hundredweight But that's in – the the I – tables the management trending, fact July weight for that were I'd had is as account and so some we that's so So, we've what that the

of follow So, elements right I looking inputs all is ratio is philosophy at inputs to customer that's be improve the we're well. cost the fantastic may for – looking for as operating now. that we accounting. revenue doing And what the across We're each department individual mean what those the job each and our pricing a trying

Okay. That's helpful.

ahead. I had – two. go There's maybe no,

ahead, go – no No, Adam.

customers it's initiatives freight and the got are so materialize and getting our handed just and favorable don't sales the thin forth, relationships just us, every think I I'm say to they're our the each service going in ones we've increases doesn't truck out so working building to They're meeting just and employees that will to increases increases. and out through fall their air, obtaining But we we these environment, environment. just these need. a so and day, going commend our of favorable out rates that that giving commend out being with a not and every because team and it's who's certainly these again once of willingly just on one these

of that just half? should that the be still the less And or a within with get per that revenue it looking for even if out with XX% that's sort historically hold revenue guess more to than would that's where relationship you you're second account fuel without because a I'm of think Is surface type doing fuel when per just or typically very No, quarter, do hundredweight I on some of it. of hundredweight x-fuel at of shakes look than side, fuel – Okay. trying rough fuel say, sense actions you getting, you're helpful. increase. XX% the number

business. don't positive per to support we the the attention revenue look can between most per cost thing the shipment go what with pay Really, and variance is and with the at the got then our with and honestly ratio variation have hundredweight two ensure the through how to and I improve are without. those fuel, reinvestments that our a we we've in to there operating trending to and our continue fuel

cost but shipment, had long second like in we variance And of ratio that second support you of fuel. say have again shipment realistically that's continue, per the investments the X%, of and the over run, the would trended a and our operating up cost about that positive I all in may positive that contribute per that positive multiple that to revenue quarter but But – can was X.X%, in said per up X.X% delta we've there in have for and XX.X% capacity shipment our improvement but were so we And so shipment when hundredweight, years, also there increase helps to the per shipment us back continue revenue to revenue quarter. all certainly, going these look, make. it's got inclusive up per we've that

sounds then, still like cycle that's that it some helpful. No, Okay. the just has room grow were that one capacity. to thinking David, point And you here. on

XX next a of when is ahead So the it way over kind course of of when steaming are or you're planning, you standpoint, of years? your from sort a and last changing look growth pace capacity at that doing the still the so months have maybe XX you the the two you X, all or out addition year half,

capacity XX% major the we're there. off our so getting adding metro multiple high and basically network, looking continue to but to in a we the a ourselves to either Adam certain were have in larger are area are those where location where is centers steam capacity, continuing areas mentioned spin places and earlier out door we of generally the find service pressure to They into ahead. we're new of doors that or metropolitan XX% in

So hay we going the we're many stay we to forecasting places. limits just us where still the we'll job XX% is don't a have those our anticipate we know here just is haven't keep capacity with in and and it the department there try in our in and to much shining be I we to mean, share; estate a while seems next service. can growth like are best and real years, I let-up making on department But seen keep reaching action it in ahead our last XX how of to having take it's do and the just market with years go after growing activity for so XX% in there lot to come. on busy out sun few of very we

this for Appreciate Got it. morning. That's very it. helpful. Thanks the time

We'll go with next David to Stifel. Ross

Hey. gentlemen. morning, Good

David. Hello,

David. morning, Good

about with bit what are We And, and days? taking to increased while. haven't do spoke, stand mentioned And customers I maybe have. talked you're what the that up customers then that longer demand IT expected. from earlier the those requiring we talk process? conversion on a little investing these Adam, call a last bit guess track you the are more than keep it Where carriers little Could you you in demands on IT about the that their a in but was

we it address. We field, last it's visibility of easier changed customers, talked a of different us, in and not of of make the getting certain more some different billing so From customers bit. do and some we built our as – changing real general multiyear we a in leaders infrastructure this look real-time things. technology I we're lot which area our most going places within out in make certainly we add in and and to and into good I that operations to little in about best office, whether starting as we're we building efficiency kind continue progress progress the of the as And from paused the want information and corporate in as think with from on and much technology from performance be our as as stronger our build well. everything the year had We've And, department, We've data data, the of back-office we overall but can. on. project and technology going done with system anything that data too, redundancies country, department they work that is operations relationships certainly well forth. customers, we so the stickier freight the here are our to the are centers connections I we can think our those can of helps our more think that systems systems may homegrown with company. out that each to that's perhaps standpoint, That where it's just And into standpoint. the there new anything his build This necessarily Sure. connectivity better again, to – cost better just yeah, customers. And state can

that better you others are Is for or might there investing customers the asking specifically in than or...? that be anything doing you're

relates different there as gets for on as that's handheld years but rolling so automation tweaks we're to always moving to now thing planning corporate drive different that's from the efficiency working many, to also on, systems, handhelds. our and many continue in and freight focused forth to route at through the we're probably certain that can And planning something out technologies, the systems. been generations to we're maybe We're system. I for it better our and of here we've doing into freight been think that now and move driver an some others we field updated some load than the our as improvement generation everything it And technologies, drive everything in operating relates certainly office. processes on on really,

trucking a role Greg, it company, or so expectations is how your than much thought quick, how is new meet it CEO done the be? different pretty in does you there every would real you've (XX:XX:XX). job

it challenges. it's Obviously different responsibilities, don't I I a some new be. new than you it's job whole like It's would take. thought new think but responsibilities, additional lot any

face the – with ahead. team you and and move work can them do You you your best

so we would pain, OD but fun, that in any. so time That So get it's there to if much It had promoted tough the times be fun. We're if I'm a in the be anyway. ugly at sure, business eases good certainly numbers. good is certainly wouldn't

The Thank you. a and team is you're strong good job. doing

you. appreciate that. Thank I

go to We'll with next America. of Rosa Ari Bank

Nice concern finding of quarter you in to there skilled across any some the And challenges, whether and the board. grow? you difficulty that or guys. lose wanted just resource board across is of the a bit – the kind they could environment in morning, metrics extent continue you looks or be to service discuss context, that maybe wage Good pressures any terms regional hiring what Hey. applicants? to additions. ask like concern, as the be a there quality But all about it or topnotch. I Is of obviously, little

added productivity a others, of some to folks other; that network lost the the it get a and issues technical of we've added across had new place have Obviously, are in think difficulties quarter. network. the involved but had a lot it's training pressures a Again, the it's than think the before, and second in moving Well, lot the we mentioned from the time growth that there There's little lot we've do not to are of the side I we've seen box across are one the board. seen in that tougher we I up challenges to employees There's locations we've that Obviously, to somewhat We've those across the are so speed. just David takes overcome. a folks; technical it. of technical. as what

train what saying. tremendous folks time. them them our of to to have load space, it's and you so get it have up get if to tools we know amount to factor, claims, that there, speed I'm prevent We But take use, easy maximize a to to does not

hire maybe be some So going I continue I little don't had. again, see less we've drag; them, a quarter. the the to than continue think in to needs quite as third forward we

get some at here hope the surely a it But made of been so we we handle. challenge, can't forward; good a least has it's I again, think time better investments, nothing to we from so. but

We've that's we a we've that committed to Fortunately, I supply we good people. think been customers got have do of maintain mentioned needs and able our thing. as to it the an to I respond proposition and adequate can't value to before, without

able needed, up been challenges good we've glad ramp all we've and up to so where and good. So, are Those ramp to as it's have.

of guys it, think OR any So did OR, XX% posted a drag the better. could at a of OR? it operating for margins in about – type is phenomenal there was some Because was quarter to asked or it quantify on going How idea I this, Scott hitting sounds LTL but the that drag looking way you a the – these company time like there P&D obviously who but time have up a lag as of of of it a XX% how this result have – the and much to much any been employees? maybe ramp

So, maybe that? thoughts could I just on get your

we've Ari, our calculate what run got that it's think margins what because embedded margins. I to what to and it are in long cost hard talked the about big done of to terms improve improve that try there. to continue to opportunity cost the just over Certainly, even we've the and number takes are picture that's in we've and don't we the

to focused stay to So, continue going there. we're

but different different taking are and the revenue growing those well we're to in back-end we be thought But that to a did, freight we're work locations make understand the get what we're different per – on sure in if Some we that we're trying the going growth appropriately or fact, in new shipment existing as may the per getting cost you're we in customers shipment shipment the gets freight then challenges on the that as of we characteristics make growing that the to for pricing – new to face places. we handle into that process, customers, sure would through get. bid need locations, and that new doing

So, there. been we've job certainly I think a good doing

creates adding rapidly well. centers As service natural growing new you're little that and inefficiency as a

some our constantly it You're between increasing In line your shipment cases, cities. creates count. a that may schedule haul shipment new operations be one for

a we've dealing environment are handled these that high-growth we're So, with in well. it pretty but things all certainly

the a that little left any acquisitions M&A? throw of Great. get Thanks a improving given OD Maybe clearly you to because pick could maybe often at You maybe more just rather have of I off out being much for progressively And kind it network balance it. story, really work attractive undermanaged your scaling better and assets that something color, of could and obviously is it's growth not if on or how be on that asset I doing way? or thoughts seemed focus organic sheet able to on part the than one for is in, that Adam. peers, but managing than bit the be it that's a guys field just LTL spend and your would ever

tough. going business. been organic as an the organic it's they Ari, status just we is. up see tough growth where technology, claim-free the it need we've the where with as the right – priority the our claim That service it prime to levels We position now – just with growth continue discussing, and our over and growth. grow decade staying and people LTL just well and last ratio low keeping growth are It's don't manage to a it's is the down acquisition and our as ourselves adding adding to so has organic been in down

But that, we – a don't this it...? look want up to – time ball We things at your now? from take are always that so our we're getting the you is high-teens, that – the companies and now delivering invested and non-asset-based people like it the in to are time. Is on always what proposals eye of managing because return truckload managing door sending to knocking at company business and when we're capital off company

XX...

It's at doing sun while invest is world what what shining. know place how is best do in and in and hay our to make The our ourselves team the knows XX% and right to best now. money we the

not any we not for going we're right to just So, a priority us do now. acquisitions. won't say It's

Got it.

for the color. Okay. Thank you

We'll Suisse. with to go next Allison Credit Landry

up but ask are this I'll long that secular earlier been Thanks. call. starting to just Good see it us percent a And of a give in maybe one that it's the of show trend Adam, in you the part small of mentioned morning. could you represents? realize what since a revenues you sense e-commerce it's currently and numbers. terms I business, tonnage But, for

shipments us delivered seeing delivered that growth it tremendous good I don't on-time mile, now. deliveries and without guess, really of of that and within and that But, residential the it through pieces maybe it's area, that's amount lot the now, have e-commerce are small do freight type. we but little for opportunities today. puzzle. that residential other any little in department opportunity lot piece that of about we're daily seeing down We being transportation We of and sophisticated, We around somewhere A seen and it become maybe good a really every retailers our implement points terms with of some specific the growth programs of of XX%, There's a back the a creates may we're our opportunity right e-commerce not we've have it's a don't fine a bit, has couple getting But retailers supply industrial comes the had as up had of in charge been break retail that tremendous probably overall It's as tradeoff large more probably just got business. to retailer XX%. strategy. large necessarily this chains because growth. whereas to e-commerce of ticked for maybe form damage, shippers the manage have little just an there expedited

Okay. That's really Thank you. helpful.

(XX:XX:XX)

to next Milby Willard Global. Seaport go We'll with

morning, good guys. Hey,

from, that to be So employee one. to the from of you (XX:XX:XX) a I to any stated peak I indication a nice the is workforce two wanted you just real season peak creeping that ask ahead to getting of little keep count seasoned months guess, last here. season customers that going Are the – usual quick going looks Obviously, forward a have year?

yet think yet but sure. of are our a that. expecting we are mean, us, ahead anticipating months strongest peak typically I we for are I

mean, the little But expected, I as the of bit given in far issues earlier country? than I year across the guess, maybe networks, as kind just in a creeping capacity forward,

relatively We highest of our that's from years. over the standpoint, tend to one tons been is And a September. have consistent in months, day per

that as tell. regard know we've capturing certainly continue us would that wholesale So in I mentioned But trends seen so we've straight our somewhat in to that any of quarters necessarily have above-normal we like market I We've and environment earlier, it's this don't growth. past. they hard had that see changes for the now expect in much to been share five sequential

a lot grown been think, All you've of has talking about that, and in guess the size the the range in I and that the we've I market $XX-billion with years. market recent right. market of XX% somewhere I share, is implied share think kind

that that been maybe is wins? and As you've business fastest-growing far the the e-commerce getting segment, related is biggest as where

industrial in think saw XXXX were whole. still the a the little the the and highly on industry that's dependent think industry economic of I late LTL bit saw overall why some you a as is weakness, when industrial-related XXXX showing I that you market, in and numbers

finding historically we're that area the to that into LTL its keep So, degree, on. some and certainly we something have of our that's may just seeing, truckload believe been to in continue this we'll small a but retail-related way freight more eye

with that, XX% think mentioned, industrial-related industrial-related, the customers. competitors good of but our lot will as those as so to well. determine industrial market And we're revenue about our that growth I of seeing continue not only a our I is growth of

Thanks for right. guys. All it. I the time, appreciate

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

follow-up. for Thanks Hey. the Appreciate it.

quarter? Just can pricing renewals you the the really number for share quick,

been. to was contractual right publish becomes yield that. as any than Those Scott, the is we renewals which well think rate, the that is embedded GRI some element now, that have in the some think coming more but reported that reconcile but as need hadn't those necessarily I into detail we increases on of it's It giving hundredweight of we're of do and per been one the the that's numbers we were what revenue through what hard distraction we on X.X%, our base really that fuel it a and anything. getting so

enough. It's Fair Thank a Okay. long been you, guys. call.

Thanks, Scott.

And at further Congdon. this time, there I'll call no questions. David back turn to are the

to questions have We feel thank Thank you all of if a you great your and day. much your anything today. and you have us very participation a further. free for Appreciate give call

conference. We today's for you conclude participation. does your This thank