Old Dominion Freight Line (ODFL) 25 Jul 192019 Q2 Earnings call transcript

Good morning, and welcome to the Second Quarter 2019 Conference Call for Old Dominion Freight Line. Today’s call is being recorded and will be available for replay beginning today and through August 2, by dialing (719) 457-0820. The replay passcode is 7082211. The replay of the webcast may also be accessed for 30 days at the company's website.

This conference call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements, among others, regarding Old Dominion’s expected financial and operating performance.

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

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

note, today, the we thank your a all, before your fairness to couple welcome we time cooperation. but to queue. a you at in before final limit to questions that begin, returning of We As yourself just for ask, a you questions

I this Gantt. Please over Chief Greg for Mr. At time, President Officer, ahead, Executive would opening sir. the like Company’s to go the and conference turn to remarks,

David Good Adam our be to morning, quarter is second call. Executive me take your remarks, to and glad on After today call Chairman; our With and some CFO. Satterfield, the will our conference brief welcome Congdon, we questions.

new diluted and I highest of am several pleased We highest for earnings $X.XX. quarterly share records. results financial results second billion of delivered the the of $X.X OD operating to our quarterly including company report recorded solid and quarter XXXX per team revenue our

points our XX on industry-leading by improved basis We to XX.X%. ratio also operating

so. give mixed are we we to believe market are economy doing price with continues and softness While we signals, general have demand our while share us win discipline continuing to maintaining and seen the

win delivered service share price. based ability our a periods Our is at slower even offering on in market fair to superior

claims the X.X%. ratio Our quarter cargo our in while remained on-time service performance at second was XX%

these service improved the providing of superior to our metrics, also productivity In addition operations. we

our improved P&D per shipments hour Our increased hour per while X.X% the X.X%. second dock shipments quarter, in

by latent Our weight line-haul this X.X% per affected by but decrease load average metric in shipment. decreased the was

This been plan. with years. of reflect over our of pleased metrics business outstanding the long-term have our I productivity service the execution our past strategic particularly team our flexibility of and and team's plan couple

We responded and year. not easy. and late this XXXX in are in than that responding lower the to the the both to material acceleration downs through is through cycle occurred XXXX now originally ups anticipated business of volumes volumes Managing

and remarkable. consistency results the in been service financial has our So

commitment to the We wavered the price have our for never from associated costs maintain to our provides it ability to service discipline. despite support due

more yield The importance results than quarter. it was second couldn't apparent the to in our financial of be

long-term combination to the economy stable have producing before many keys of We support times pricing that and improvement said a yield density a with and environment. positive the include margin of

improve improved leverage not Although conditions our macroeconomic second and quarter, company to operating allowed has during the and loss were which the the density to of of our new more performance productivity, than yield operating us ratio a strength record. offset ideal,

a important the to respond continue, forward to to to second positioned service environment, by cost, are the the softer anticipate our well look of XXXX, we it on-time domestic plan strategic continue economy on demand focus any As execute we claims controlling of our will although continue acceleration momentum. we will that our customers price. volumes is in at we we economic regains note to might half free Regardless to with that if fair to occur providing superior long-term

technology education employees. of to investments in make of and our significant capacity, continue family training We OD and will also

critical is long-term our how the may we expenses our investments ongoing increase short run, demonstrated sales with have solid market achieving these investment to share returns. in While in

execution on in during of profitability LTL of one growth Consistent periods strongest industry records create business has and contraction. us expansion the and the helped of fundamentals our both economic

to our growth we and continue market winning for result, confident prospects further ability value. profitable as share, a long-term As well increase as are in shareholder

Thanks for our will in morning. results And greater quarter second joining financial this Adam detail. us now discuss

Greg, morning. you, Thank and good

earnings Old ratio Dominion's increase by and our per The second $X.X to allowed $X.XX. X.X% X.X% our revenue of to us in the basis increased billion to the improvement operating combination XX revenue quarter. point increase for in diluted share

revenue driven growth X.X% was improvement LTL hundredweight. for by the Our the in per quarter revenue

second of volume decreased loss as the per pricing. freight, to shipments X.X% our environment believe was day LTL consistent with softer These Our compared decreasing also some X.X%. reflect to for to due quarter approach and day LTL long-term XXXX that tons we the per decreases

We per weight half hundredweight. last period same of per consistent revenue on expect second the will in be our XXXX have also to LTL effect an shipment the with our of more which year

tons for day for seasonality per the LTL LTL sequential a trends normal per the day and below basis, quarter. On shipments in both both second

LTL of shipments compared day the and to as X.X%. day increased to per the X.X% the X.X% compared first quarter increased of LTL XX-year X.X% per As XX-year of tons to increase as XXXX, average compared average increase

is below terms trending per revenue although our in the seasonality, normal July, reported steady our of trend For holding volumes actual hundredweight. are yield

month a July year. way year. the be this based We per than of first growth how the holiday each little hundredweight year, of revenue is rate well half on trended last to of the this first as The actual volumes has fell expect our our lower quarter in as that since the weaker,

comparisons with we due change is misinterpreted a and ensure to tougher a no way in long-term expected our philosophy. However, as want was decrease pricing rate that the the a growth this XXXX, to of third quarter to

target We capacity. also will technology supporting in offset continue center that while continued our and service to inflation cost our investments increases

related Form We will and revenue quarter for details provide actual second July our XX-Q.

point of a operating XXX point XX basis revenue overhead expenses. in than improvement XX.X% in resulted in Our basis to Greg detailed more which increase productive productivity, direct our in offset as the percent second operating cost. as our labor improved ratio points in the improvements a XX quarter improvement basis a cost

supplies improved also primarily basis XX to costs. Operating points, fuel expenses due lower and

as aggregate as percent the effect revenue expect Our the XX increase points, of basis due and percent given remainder deleveraging revenue to for we overhead the in our technology year. pressured costs point basis the a to costs investments depreciation revenues have in overhead XX capacity of our of and be increased primarily the made cost of a lower significant we

capital million for and XXXX million million Old periods. the Dominion's from $XXX were $XXX.X and for first respectively, quarter second expenditures same cash $XXX.X million while operations $XXX.X and totaled the half flow of

to year. continue approximately $XXX expect million We for total this capital of expenditures

quarter We our the and million returned first $XXX.X half during of the $XXX.X shareholders to million second for the year. of capital

For in $XX.X period, total cash of million the year-to-date this million share repurchases consisted $XXX.X dividends. and in

we began program. increase second the our our million quarter, million facility repurchases new in $XXX $XXX With during repurchase year the X-year schedule one completed approximately prior of and ahead

rate effective quarter XX.X% of Our XX.X% of compared was in effective XXXX. for annual XXXX. the to for second XXXX rate anticipate quarter the of our be the quarter currently second tax third tax as We XX.X% to

we're time. This happy concludes our this open to for questions this Operator, at remarks morning. the floor prepared

today our first from Instructions] with question Landry [Operator Suisse. Credit Allison comes And

of yields any second yields bit an If sort sounds call behavior steady fringes the quarter in competitors. at if a little that wanted -- when but least persist that you update from on seeing mentioned competitive on that. ask wanted rational some the that remaining that's I of I to first quarter, there's are a or something get pricing one the curious If change you're your the just from the pricing of been side? the about aggressive landscape. on It you to saw in like

very our yield as prepared inflation, environment increases of cost sideways we that is Q&A, is still each primary we with which you Allison went, still And and we our trends, think target is after in a we is pretty go were remarks still last things things the first increases our consistent this is And see at that with renewing. the quarter Yes, we're on but I'll Adam the forth in the certainly and renewals so our quarter and look point they year well. when and I view that we call first part out said stable getting it the consistent as quarter. contractual consistent to continue stable a is maybe offsetting view seeing little and contract our

impact hiring softer. the Do and on on really terms that you think second you. rightsize you that a bit, of and a levels quite up of how have and demand headcount XXXX of what sort you that to levels productivity. bit resource think about now on side guys through are that ramping should the And in half in Thank over your most then resource since need may we were that and

the re-establish our have if that made making productivity Allison, the without you necessary we to but look have at tonnage adjustments. did we at working gains, do adjustments. you made we working, currently we those but -- can't levels that labor our cuts Obviously, labor

labor dictate good pretty we feel with through going going do the forward. quarter we business conditions and So where what will about we are

Deutsche And Amit our next we'll Bank. take Mehrotra with question from

Congrats in say operating a quarter. I should performance -- on the the big congrats on

of allow to manage cost to or but to if easier to and shipments driven ability just more shipments in now obviously disproportionately decline about guys you by opposed the does driven being shipment easier, wanted ask a your get the structure, and as bit weight as have shipment tonnage could per just I'm step profitability cost a down the if Adam. you adjust curious structure. just shipment? I weight maybe to per tonnage And taken So talk comps, declines started your about they just they get protect you better about

feel the something per the we first to and felt in we've with saw talk turned got some think curve just to year, we disparity been of from the the we can cost the in first the still we our about of already been what ahead year XXXX and they response has good trending a second weight negative. to we quarter year changes saw that this last -- were of the that there shipments half, compared of and bit the Shipments, positive you the given I little half slowing is this like more I trying see but shipment

June about down that change our and were talked headcount the other. 're the end headcount of point right we were of our look we you X%, just September, at But versus we in at at in we where alignment end if coming shipments our and one where now the versus compare with

as X%, about in XXXX, the third similar look cost this we in in and we've in versus the I really where just quarter we XXXX much day alignment of you when range, and we’re of per shipments at down Greg progress shipments saw the with a improvement change performance, quarter quarter of down And so productivity great. our are the direct through second the and said, we’re think certainly so, got doing I been pretty as mentioned, it's as headcount, in type

productive been offset able to improvement seeing that we're get of costs. So leverage in seen and expenses operating driven, of and some our more labor some than some loss cost, that's that supplies the fuel that we'll we've overhead improvement but

Yes, side really hour you have opportunity then see the would to imagine through. related that, didn't would and that overtime side we and on come have you I just the on some

know up some control a the decline don't just given Just fringe if from the related hours given salaries, actually shares. costs your to bit. little benefits the But wages phantom in were and that in to ability prospectively talk just here, I and revenue trends? could you employee about inflation if maybe per partly

labor we’re I in what benefit our that think -- that's costs. productive that seeing so

a basis inflation talked compared. of component Just about, you our fringe and if the see we little did benefit costs will, during improved labor as has points, XX period but the bit we

where I XX% second we and year. in talked about, I last we anticipated around the that's and mentioned So rate about going into that think quarter were I fringe this year

performance a type the our same of that's labor performance-based maybe a and of saw bit so had lower. favorability had salaries pretty some we of of cost, a year. Our And lost from compensation on we they're lot of it's and of that's in bit fixed a -- and just was that side -- overhead little fringe some metrics that rate year, base. And kind the the standpoint we growth wash is forth the then without versus so rate bit and revenue, so flat coming percent a the quarter was an just, there our little XX.X%, of last and little overall because out last in of it's

you've to shipment quick actual just and pricing, one just is out yield yield. a so And in parse the, within because tough then per pricing, slight the I I talked on same-store what's could you just to that little all and weight was increase out, length mean, but about follow-up of because not could speak. much But, if figure it bit hoping I Adam, Right, of slight. to what's

kind to trying Just within of number? that what understand pricing the core yield is

and the basis that's north to shipment I'll in shipments target Yes, range. what we for is the of cost as the shipments per we reconcile on inflation necessarily the is handle we be of are, what shipment long-term we our look at us components I say target we're given and always and cost through, into each that other we're going renewals because what those basis of contractual stopped well the to of number, XXX that we what for revenue That's per anticipate primarily XX carriers is at year. and go but some and a we inflation we then renewal cost seem maybe kind and getting our revenue shipment, sort still know looking never think points always you per to

try as And and where drive in with talked then extra continuous network technology real our in efficiencies. investments our operating we estate that the need ongoing systems we and that we about to

not are So we we've year, There we expect this but increases. into necessarily coming strong what is that get last a saw to year. continue didn't

some You we think should account-by-account repeat. we should performing each increases that those more on is necessarily and of operating last accounts know didn't stand our accounts lower pricing got philosophy basis year in its higher ratio on which own

in showing and yield what good comments, is record feel the up, both setting renewals revenue is drove this us way trending reason EPS. or mean said in and his I are that's why but So, I the big the our about certainly Greg for quarter performance in

our Citi. take next we'll And Chris question with Wetherbee from

Maybe could know it through tonnage had I May. of in month but had from just to ask down what that look step you through you numbers like June, looks a like if the run don't been the what mentioned little I bit they quarter-to-date before, the

was? curious what Just number that

June per had tons was X% in May. the X.X% May. that X.X% shipment the decrease in on April, April after and we a in decrease followed in yes, had a side, Sure, tonnage X.X% and and both a in a a on decrease And in of And June. shipments month decrease and that day the X.X% then side we decrease

suggest? than from give transition commentary, would the the number, a don't the July seasonality typical XQ although was XQ, to And you the little weaker suggestion is

quarter, think it's year. quarter, of It start the for seasonality through this is of out below the and our back it But first progress really now we but to quarters. trend consistent that this as several month normal July way seems that trends been going of since I in like and been is revenue have been place last we the last kind

we've below been in January April so, well in this And year. pretty

days above August. bit - holiday fail through we of but up and a And with way seen see I expected mentioned, things pick month, is we've regard but would build. I to set the the and, see weaker, kind consistency it a so, see has to start just it expect from July seasonality year-end, the expect all continued a negative The to like the so continue little in the would back what to the we to to up

per the, report mechanically, you relationship revenue the the just, that hundredweight shipment. weight then think about the with and as per And we

I walk going start ? second think that just hundredweight one, per shipment year. negative comparability one us of the we last weight the you relationship. mentioned move This decline of that is Can of has of begin or on impact for mechanically, is the the remind revenue growth. towards per to see sort normalize flat of on to sort as that a you it revenue to to sort us Is sort hundredweight per sort impact that half through, of relative

evaluating track freight and There of of is got well, increases, as changes per you've contracts weight for other length mentioned to but that and no shipment completely metric mix we're linear and the that way are adjust in reported typically, and little seeing renewing to mix historically the haul-in-class like for increase, no I that that impact still into on and you'd would expect every They're renewing a is we're the constant out day period they to holding us. third the quarter an as there shown second. bit and one come renewal so see it's going expect of up contracts of we

second so in to just from XQ said, little number And with assuming that acceleration the on the in we reported saw XQ that last based a year, the and acceleration normal been where actual of to that quarter double the into metric X% X% been the that has growth between versus year. going somewhere we've rate this digit range may type third change

take we'll Morgan Ravi next Stanley. our Shanker with question And from

question last quarters row. So, tonnage I the in going for four go your on years, like just to usually here, very a mean, it's if for tonnage another I run long. mean doesn't the XX back you negative

flip XXXX or level, like I too environment the to macro it like going call? feel uncertain already tonnage is to the does that you and you at positive is make second that to do far half imminently think feel still in going into

bit a it soft in little and but of a softer. part the still feels a a little the It's last feels year get bit easier comparisons, lower little

at have right hopefully now, appears soft. and little it we than So, we macro just to we'll don't to a be it better end bit flip tonnage But to a the our positive expect. but expect pickup

really not day day. good is consistent levels last did time. would that this thing. that's It But to seeing Consistent, the year that the certainly just we

you but read as certainly us, you've been and the that but freight landscape numbers And, suggest of reconciled to seeing a were we that but as just to hasn't Ravi it's I'd I'll lot industrial that at when what certainly because it's still transportation showing side, there positive. we it's macroeconomic on all got just trends maybe the it's metrics the pay growth, leaves not is - add, that showing all strong the still across look tea positive hard to, particularly year last not attention say is

the spot so keep consuming bright is economic in got that and ultimately healthy has somebody good to is and that, free. I the one that consumers data that regard think everything in And on a fact consumer and the of so still will you lot ship there's if produce

you've continue follow-up in And maybe has in your to so deteriorated what OR OR a far you is the recession it keep done into current tonnage historically improving can your of with your even number initiatives even OR of a obviously, those the but improving. you're the but of you place, in that negative the in just kept think the comps to that, but OR have? messaging XXXX tougher environment are that of spoke Again environmentally kind continues when putting you that negative go you all off, you tonnage bets again, keep if environment, can here it if improving

with ratio Operating sequential XXX. think performance a from that XXX operating I average and the the Ravi pleased of improved is second. we've points quarters was ratio and basis the now into first the I done couple quarter it long-term for

long-term points typically cost to of back XXX kind They comparing about of revenue I up good feel points is the we've So our with to ratio to basis our with we've consistent good - operating XX growth, quarter sort done the been third typically XX so, so feel in are respect it's range basis trends. where slower had is what and second-and with cost. very periods the

we was and things back going XXXX, but cost some a on the even some other point few periods basis there, that worst XX can increase though of the in protecting focus for respect grow got XXXX saving where slight third a we of to to at OR the of got we've the kind to Certainly, is and into certainly definitely of with line room improve to its money we some us to or were still in the the continue rather earnings our terms that's year in to goal more show operating some quarter bottom and improvement protect last ratio. try and that

effects one from and proverbial through How does XXXX the space transportation last that happen ? corner. IMO maybe that me, then guys are around ripple about And thinking you is when the any

the think comes back. prepared for point at we approach. mean are this take we we're growth I to I wait-and-see obviously, if going it

our I on in As have continued capacity. execute remarks, mentioned my gaming we earlier to

be, if spot. gain to so, in we accordingly. capacity If so it's good adjustments then not we'll plan I we're it proceed a better fact think make Our it's than in expected to

I that or we've we a in positive a think proven make to that in can we need adjustments Again, make the environment. negative

So we've are see do what quarters, last we you done, hopefully, in that with the able it. particularly several to

So hope up. that just pick let's things

Jack from And next Atkins question our with Stephens. we'll take

year. Greg, first in from would curious, said know the you're just of kind soft would to expected any, your feel their I what be second things business know of the one I there customers curious you half hearing out you, be about trends still for guess,

industrial UPS yesterday fourth the expected they call to think conference so in on I slightly production quarter. their negative be

over of your business underlying You couple sort of past second conversations about into customer of the are fundamentals thinking How year. aggregate heading you half months. the the

part, are most major for our positive most of Relatively the busy. honestly, fairly customers

seems makes it to So positive and that good. standpoint that be feel from you

good very other of our is a us we to extremely customers our has positive. gain as forward, things like to we're is with what happy very, and performance share that doing I but in and side put position go continue think our a that that The definitely are

good busy to seem the Our customers in for industry particular. and be thing a that's do

bit normal on the that bit as think now should below seasonality, from whole so When third a helpful. that that's up early quarter in your of about more it call is normal of XQ better it just being about expectation towards we at kind you than too perspective, a may make following to a kind the XQ a tonnage aggregate that little August, thought normal or versus seasonality. seasonality, the ? And you think talked to then Okay, be Adam, little back that we're about but as where we point is return July

I freight continue don't get. give want this think and to to we it that to adjust the at but point we that to we watch in we'll guidance handling as continue need

next question our And comes from Scott Group Research. with Wolfe

comment flattening going your get per to seeing about that because move flattening Adam, lot ? the are that just flattening it Is or just is something think it So out weight comps you July. shipment then up a half in out, to second because you're out is easier the it's where starting sequentially to and you're is in

freight most The of spillover about and if we to to, you and getting July weight that by June to in a lot our the was XXXX of of recall shipments year per letting pounds comp, were try truckloads last control heavier XXXX we related it of in about that just changes to and shipment exit then weighted type naturally. it was happen pounds freights us operational versus some made

seasonality expect XXXX And flex this XXXX-ish an our pound I'd necessarily been up any per economy that year, and is saw of bright some immediate going weight kind hadn't but range and of read this so sort shipment we from and consistent been it's say. we've which that seen say we of a pretty down spot and lower has that per on in been the kind on another effect that, there to then you of aspect might

start that little about revenue the that first do back as not same, as that's sustainable to it then, And of are quarter? pricing, has think much is in the freaking we you shipment you pricing of growing it's or X%, half out reacted year? per improving maybe bit the been last it X% in competitive but a quarter's now terms environment In see you saying we're the

and say, I environment. of on of shipment coming we it's was and stable But, standpoint, first would X think saying years would we're with from just ex-fuel, somewhere we'll expectation X.X% continue increases see our about the of certainly on a this per that want quarter a cost that. to are I we into it's, per so that shipment get around to that target last revenue it's say, we be are try certainly favorable what year we're coming and year continue think to question continues your so I to very off that did shipment still per or rather, that to seeing we last revenue talked I north favorable very of basis consistent like and

down fuel, into last where we rates where and seeing second we've we're in versus do, Including quarter seen the they continued fuel it though it's definitely July, were year.

on in metric So and as fuel little that performance revenue well general. will with yield just that line on as top be a bit of a the headwind

it, have And to up head count ? say just may going think did if real be quick, sequentially I flat you missed down or you maybe is

quarter. flat stay through the somewhat to Expected and fourth third

next question our Seidl And Jason with Company. and Cowen come will from

about tariffs half any of this impacting first the a your your talking from customers year In the in pull-forward them of business non-industrial were perspective?

we really for us carriers. that the out Yes, we've high got well certainly I retailers product customers our programs got a that overall, conversation supply favor in perform ago particularly visited very there. retail us many more to place service and But and continues several West a good been think of optimizing have chains, bit it’s been weeks out little point heard Coast of on [several] it their business a

but arrived we've of in that put on-time place. good most element And it our of seen for by us certainly, type growth the been we and that's benefit full that programs our managing many just call have retailers big it's and a date business, in business,

a spot. has So that's been for been and us bright good

up, it's So, probably that safe that but it's say not XQ the come volumes really impacted to much?

Well, say. to it's hard

we're I just, business. bit a that think customer individual continuing maybe that we're market any we're maybe gain there of our share to continuing just has been an gain offset market impact piece in little But of that is there, feeling to pressure. share but

months. Also either in side some in tell much X from you can there bankruptcies from LTL has those the the been guys picked last you up what of freight Have bankruptcies?

that but not We so they of very, We But most they impact, a small we business have the up very picked sure a the we up probably definitely And I'm of we all initially we've of that kept kind did of big did some, were get-go. are took pick from phone flurry some had some. but business, but very, some. but calls and small, opportunities both on. get very

a Not and somewhat help LTL okay, is keep the big world? that pricing in stable one,

Honestly, I'm to hold enough on. sure either needle large not those the move were of

Ariel take our we'll Bank from Rosa America/Merrill of And next question with Lynch.

question that I about the to wanted additions the the to capacity of second half first was which or you OR in and on extent you the some a might think ask the So just of with given you XXXX you sustainability incremental have in adds? went of of going think mid the into - what the this margins the of I quarter. XX XXXX. capacity and those Maybe north address Certainly levels XXs could think it drag

margin. year, fact on many way out And And additions margin a that business don't times OR the math the incremental that quarters capacity of good independently and a the second Some have element the caused cost the we before of working. most to is the of incremental that we've in don't this trying always the but metric, is put that is the of manage to about first that and trying impact. make, talked business. to at huge a function just benefit think to I revenue We're certainly we cost take

have depreciation center service we and a and at growth the huge that line. the added depreciation were this in year, have equipment second that those cost of to Certainly, shipments down. speaking I’m seeing us in impact And we're anticipating capacity least quarter, on

we'd on there on it fleet And we a going cut other CapEx our but heavy million help quarter little little versus probably of be. fleet. cost, into So carrying is to a the bit, the tractor the is our where besides to $XX depreciation out like side this

result. a as And we've seen some inflation there

that gets been costs is in buried of maintenance kind excess some there. of and expenses, it operating there certainly the but some fleet overall And supplies

go more CapEx we've what of transition point, looking And think and XXXX. get but potential will plan. what year will be environment we'll XXXX that that and our the just tractors we this demand As then our somewhat need for growth in likely we at we at probably just offset got as into will be some

great into color, question. That's next leads actually my well

cash to a is cash net bit So keeping cash trailed nature the improve are the impressive. conversion. I numbers is and little talk the that wanted of free businesses. intensive free you putting asset about of little a But that maybe guys flow partly opportunity an bit on you a guys obviously of are if about slowdown conversion. income think But that's up flow quite much to how there's free you an eye a bit there little do And that? flow Obviously,

will seen an be things us opportunities we themselves. it potentially we've that opportunity gives present to We'll periods in facilities. look that is but expansions the some depends slower service opportunities of accelerate at potentially and to past may center say, what some existing other easy one in And what of the answer the

for goals. eye to market certainly going open those so of opportunities. And got keep our share we long-term We've are

regard we will center. ahead us got in that require we've And of runway service investments significant a and think growth of long in that

carriers some accelerating certainly look centers in we So if accelerate environment on then slower of I service at would we where that opportunity. made available, in can it have past think the that a other

but And footprint? terms just long-term of I think in to center me terms where we target remind it me, call, of might service get in the you target about like what's to the last remind talked

constantly right now. that changes Yes,

got XXX configuration gone I gets and service as we what XX centers through bigger, today the or a kind think plan we list of at service we're so. out as we've of and figured you the changes. know But network company about centers time

service And locations metro operational efficient centers been versus break doing we've local kind areas. We've is and of and have figured changes that break our of multiple more out to some bulk managing for around some freight. other with growth us

So is we what don't to don't know there elements know. multiple and it we

the our build and and optimizing smarter operations. with trying as to line I network, our comes both but haul we it pickup we when get So efficiencies think it we're configuration go delivery in to

the out that that. things may further guess one to my looking on XXX. we've those So that's is, needs approach as XXX of than be just curve more got that the the it growth it be maybe now we right But that line a like

from our Capital KeyBanc Fowler with take we'll Markets. And question Todd next

I the you third and magnitude the you for annual from I have quarter, any year increase timing standpoint? could think from share that a and wondering that that expectations during wage typically if you sometime was this in put

the The we this wage effective year give always first and increase will annual always, well. be as same the in that same Friday September timing as our

and it's with Greg putting you'd environments maybe think kind the with through magnitude just the couple of on something year? you're the where labor pricing or Is been do expecting that what the side. of of years we past And what be how about a magnitude below from in this

Todd. It's going we've about but somewhat to really numbers in past. what want exactly to talk be the don't somewhat be will done I similar, similar to it But there,

We so haven't not internally this yet, announced prepared we're to.

not first sequential with that's the look OR the to so fair give on the going Adam progression. us commentary You're but

the typical something process XX that of within typically said kind thought XX points OR? you you would XQ on think your or deterioration of kind XQ expect, embedded that's be I to would versus seasonal change in that a basis of

Correct.

and full like XX% made you for you're the fringe Adam, sounds it then, in be year the the on XQ. expectations And for comment to that the for around that’s, range

think out, It's you difficult about should quarter the play a know really some XXXX that factor year I of got the we comp side. think you half this the XX% the got sight you're pretty on be point. something at in about that that of second into the the than for line benefit is or thinking to you've fringe would that to in on anything that can I think side different us but good help that fringe fourth you had. of we've the make

in quarter, it operating quarter year was and about fourth Well, the the points was XX basis the basis last XXX typically several favorable only fourth we higher third. Last had versus the points in adjustments year higher. ratio

go process workers' had evaluating actuarially of reserves. And annual claims. Some comp and an we liability our auto we was of through our in certain that favorable our insurance adjustments

that we had last through year. adjustments of And the that to fourth just favorable roll quarter that several similar fringe line in

think to I rate fringe between of benefit XX% and that workers' reflected the our in some favorability XX% that comp. was

adjustment that then and phantom favorable we well. in health think had stock favorable quarter I group as trends

a favorability through quarter had to lot are actuarial rolled just some know of we that of that way adjustments going which never you So and those go.

mentioned variability There consistent fourth And look more that that of while and year-out. quarter year-in very, quarter, for that's why I that the fourth third quarter very third to is kind is when reason. second you at from and

it quarter comparison. about But think fourth for a doing like starting careful year-over-year quarter third should sounds versus we fourth quarter point, and be sequentially for

Just given in year? fourth quarter the of the number last benefits of

necessarily would can way. Right to, expect either those go

Right.

type very all XXXX But third last same all like of the direction performance. and unusual, to was you year of in them when quarter at in, come did fourth expect magnitude same - would that they of necessarily in the look that a

comes have those wish Greg in so? too we about to worry guess won't back, I much let tonnage things, the Well

of us. None

our Research. we'll Buckingham next And with Matthew take question from Brooklier

back centers. going service to Just

opening I'm If you and hear to about be have talked that your number. thoughts curious you XX end quarter count to on would this service think at year for we're I center end the first higher or the expanding previously just to about or X if going Adam. be locations, great? lower that

X our quarter we year. centers may the XXX is quarter current At those of think in normal our of we or think start we'll of those of this count defer and the opening ramp service just next sitting service what on that at into as I last call But facilities getting We we actual until schedules. is on end just first centers centers we're service the about spring year. currently based the completion another some talked the freight of finish

be will ready. be and they finished we'll So

Just forth in and early XXXX. drivers staff as they be and keep just then that them up operation so may move the we not pull and are things

to maybe a committed, still bit you bit, levels tonnage lower service little more previously with it like opening little sounds had even the thought just entering up the than you year? a So, timing different centers,

and will and Of open three six, be probably for talked of those and these projects fit the that you're or of will business. they open some in just in that what plan committed once about. total be long-term two we've But

going just us several opportunity. long it's is the years. making growth to are term. long-term we're next of for we that And for helping decisions got think plenty plan we've now revenue The be Our the

completing saw wouldn't a we not expansion the made like much when revenue investments the they we XXXX. that was position XXXX freight the We did. increased projects slower. projects And to when in estate in we Had handle XXXX and in made certainly the those have in been real team the

make sure got So our got know some to we critically capacity they’re want keep we've think and needs. we those going. next location the important projects move future we to where we've to complete We long-term on to them, that and

and and complete in this XX% we'll that capacity openings we we seven about expectation like in what XXXX about with the that overall, And is, excess even to had the our XX% ballpark. in capacity of excess system maintain year the the is with

these and that us. So we we economy pick service want for growth keep sure to will ourselves back believe And projects drive in the going - when to we certainly our shape share we up. market put know will that from make continue good

a thoughts but know a then an you think has is carriers the the actually cost that could And driver little the inflation competitive. from so, it's market do bit drivers hear not a market perspective? less apples-to-apples become truckload LTL little your here. bit comparison, market beneficial that we if from I of heard to gotten And Curious some be looser

certainly for in drivers shape We’re good now. right

that We locations, we selected in good issue in a don't few right shape. really hiring maybe than Drivers so an now, going forward. as are but other see we're not

continuing all. but are it from issues year, train a additional but any pace last we at that standpoint We slower drivers, at we did expect don't some to than

Stifel. with Ross David from comes question next Our Instructions] [Operator

anything the in rate start utilities going good what if one-time there line knit morning. that year-over-year a and run quick just Adam the Yes, and communications should to was on down is forward? item there be

is adjustments some or there always that's adjustment. one minor in of kind the material kind of through Nothing that is run There there. way any other

contract out that moving consistent be I think. of quarter-to-quarter may remains expense into we As another, one into relatively or but

And so from be of rest here the second for to do level you year? quarter expect the about it

little this year, as in of working than over probably the that more, lower and But were bit and we we're that But we're bit so there it the was to [indiscernible] the come platform. step little as on transition bit caused absolute… at We've reduction a have be project communication will do little in where you on bit may It into first. a may new have a switching systems a little bit of of that continue second stepped it up in been higher kind a little board up middle cost from a so, looking quarter. some will an

deadline, have than was to better expected? AOBRD/ELD it Are next that going more done you that my transition before just question is Yes, on for some going the stand. it your does where color

certainly David major always good, And like you a out we snap there's completed there. project any here the going few It's We're working it deadline. expect and to before it's roll well. but through this well photos as have project those, going

Dominion run at ELDs change did? than that do different from Old how perspective an network did anything does essentially AOBR's the all, the And you the

we’ll we so, abilities at so No no all. same communications have that had changes the

information The we It's what that tracking the all we we're evaluation working want own that we we of data or get and sure do for make and easy on. systems sure big thing all missing and the for the telematics it us to into making type our is part. hours is, out the through not with is get

go than David. and in through through them it that got work. we're a and we're It's to aggressive more you little why working and plug working team turn project we've it pretty on just That's on can't them that, but a complicated

for additional no questions turn this our time, presenters queue have to like at currently I would we it or to the any And back in remarks. closing

you you us hope a to great day. call Well, thank please participation for you have appreciate We Thanks feel free today. give we your questions have I your anything a all and and if further. certainly,

participation, disconnect. that you conclude does your Thank now may And you today's for conference.