Old Dominion Freight Line (ODFL) 23 Apr 202020 Q1 Earnings call transcript

Good morning and welcome to the First Quarter 2020 Conference Call for Old Dominion Freight Line. Today's call is being recorded and will be available for replay beginning today and through May 1, 2020 by dialing 719-457-0820. The replay passcode is 1502975. 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 these that, news forth the Commission set may be Old and and release. Exchange whether Dominion's may actual in undertakes information, results materially result differ otherwise. filings in The publicly the cautioned results important of or forward-looking and hereby affected company the among morning's factors operations And no are consequently statements update from You Securities this statements. others any as in new to obligation by events forward-looking with future statements, a the

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

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 call turn to remarks,

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

like record cautiously company the of share believed environment the and quarter. positive. were improved quarter our We as will revenue we These diluted also seems this point, tonnage at the first how to our the achievements for beginning new were but our quarter We turn were increased. memory was first quarter as a First at operating earnings challenging with notable operating given distant XXXX, results we down. both were financial optimistic pleased and a per ratio

with of however, have changed XXXX the initial began for the on the and environment. line line business to middle realize XXXX, and January of and were impact seasonality fourth Our March, the results in our country expectations. would and normal in Things pandemic February the the profound quarter trending in volumes were with general we COVID-XX

anticipated While guiding no pandemic, our team management periodically have crisis planning of one from this that could exercises the the developed situational performs. effects response fully our the was awareness

most the on of employees, timely this of critical things One training customers in focused with during vendors. we communication importance and our

early As stakeholder with communicate groups a rapidly-changing we we the to and address result, these well-prepared were as environment. often

While business. our types also our again, and no coordinated, plan characterized foundation what I our have our quick repeatedly true of our success, Once will response importance as our the people these effective. and response believe of we of of in flexibility the be was the has perfect situations, culture. proving demonstrated

believed most challenging that and from during our has our culture difference evident long have competition differentiated We becomes the us times.

of and in priority that wellbeing the first mind, our With and be safety of impact family our as address the COVID-XX OD employees of to pandemic. was the continues we

and disinfect many our facilities, employees our our established and limited of non-employee face adhering we the increased our coverings Prevention distancing areas within to Health cleanings state guidelines issued local social clean the and to employee also Among to and to safety, Organization our U.S. by we for health related have We employees, any and initiatives, and mandates have practices visitors, resources Control distributed Disease trucks followed provided workplaces. serve. World for the while Centers the national, and

other medical around extraordinary thanking availability customers of this provided payment essential a serving employees help also pandemic. for the The way a products through our the crucial their in bonus and supplies effort to trucking industry them with as non-executive groceries, We special is country. of ensure

deliver response of We best-in-class we to employees of continue OD family the as our of proud service. are

decrease providing associated continued rapid service In proposition business we of with similar terms value focus around stay-at-home to of and the have our levels in how superior orders country, on responded a the at we to the price. have fair

the claims fact, produced first quarter. In of in record X.XX% we a quarterly ratio

performance ongoing to service which has price discipline, success. long-term critical is supported Our our our

have seems Without service been improvement model. yields, over which customers, long-term able supports on improve The of our capacity, our for years. also high-quality investments existing business the our in have recently and of in we support our not dependable would have nor superior many increased to standards further importance service to

many business. are that large We customers open remain so national account fortunate have for to

customers continue Although our customers goods, basis, currently ship closed. to on are often many of these an accelerated

pretty furlough ever since. off of adjust dropped April, revenue, reduction reality with belief workforce. us been remained these the shipments business once implemented volumes has employee to health allowed with of our to this and In but provide seniority at beginning program. will our necessary the daily cost adjustment to the they will the result, program new of have a duration unfortunate our significant retain This in be benefits and and significantly company. at we sudden The counts. the has a also that case, this an no levels economy reopens, steady however, for their As employees The will restored fairly quickly they

fleet. equipment minimize maintenance was our our to quarter for fourth efficiency also while discussed lower the parking heavy measures expenditures costs enter fleet which our as normal our equipment was reduce little than this have expense, Other certain a included We capital was why on we that XXXX, improving already year. call of to

the cost our this for adequate foreseeable We allows incur maintain depreciation strategy but will units, capacity us to monthly all still future. of equipment for

variable ever anything unlike confident and down in environment decrease our in in majority process. up continue be works are difficulty are making we excellent an environment doing job the managing model macroeconomic rapid drop the uncertainty add to our and seen, our costs A an of revenue. the A but economic of business ongoing relation our and about cycle. experiencing decision to costs currently we business that we to have are We

manage volumes return. when levels increased we adjusted while We have preferring quickly also business simultaneously how will

are our as return news recent responding encouraged can certain strong in reopen. and rapid various the as that difficult. ever process by that will allowing states are country to of We fully I be growth realize businesses to also believe

than We to employees their quarter existing know past the position XX% have our increased as this and to needs am in response better with dedication that of in I capacity customer experience, our seen proud and many confident OD periods puts any that to performance revenue of comes. plus this I'm we other first both a carrier incredibly our respond time from for experience us pandemic. growth. the team whenever

and that helping the frontlines promises. world so can OD Our employees are everyday, in on continue keep the clocking

for this Thank quarter in Adam now first you morning. financial joining results us And our will detail. greater discuss

revenue first for which quarter Thank and of was $XXX X.X% from decrease million, Greg, Old was good XXXX you, year. Dominion's the a the morning. prior

per first included workday, X.X%. so The decrease the day of was extra one XXXX quarter

XX bonus of improved $X.XX. in earnings expense Our per the to paid March. and related increased share to operating ratio points to include $XX.X special diluted basis our employees million These results

that Our results the reduction in first increase X.X% revenue partially per tons the revenue for LTL X.X% quarter was hundredweight. the in by offset reflect LTL

per revenue LTL hundredweight X.X%. surcharges increased fuel Excluding

by was than recent were the lower shipment. this periods, weight affected rate per While X.X% negatively yields increase in growth our

always important same increase in is shipments. actual on yield as wait It were of per of measurement most can to hundredweight for that month is a average notably haul XXXX, length pricing. a a have to the per not revenue March the for numbers weight shipment. per significant yield to compared understand is X.X% flattish factors of hundredweight, equivalent period Multiple due being Our and revenue to primarily impact

increased fuel The shipment this pounds average average As from June, quickly contributed hundredweight XX $X.XX per July sequential in revenue was year, so pound XXXX, an per per example, changed in our surcharges. weight of fuel led March revenue from our shipment excluding this February to hundredweight, surcharges. the increase last sequential to XXX weight a per decrease time to which and excluding $X.XX decrease

in Changes in respect per revenue with not also are changes mix. to hundredweight linear

our we accordance through pricing negotiate philosophy. rate bids increases work to continue as in We with long-term

due significant relatively COVID drop believe in considering demand the We remains price also pandemic. environment the to rational

quarter effectively direct allowed These XX in revenue operating due points quarter. quality to revenue our of to a first our basis operating first to of cost as Our efficiencies the XX.X%, and the efficiencies. operating percent ratio us improve improved primarily increased

Our as per also compared X.X% decreased average in average to day. headcount shipments the X.X% decrease

trends, April our top-line XX%. down to close per revenue day to regards In is

the are average fuel Our XXXX. per price shipments it average also as diesel weight shipment reduced than was close has revenue XX%, trending April reflects slightly of to lower Decrease surcharges in fuel in than XX% is revenue. while increased worse

the no and have reopening the Our similar eagerly slightly that actual when fact than take solace markets expected results the orders we country. the initially however and around better await stay-at-home were country. implemented in of throughout been We

in related our we details actual will provide usual, XX-Q. April As revenue for

program Due balance in to furlough freight experienced revenue we of decrease in the current the unprecedented attempt working trends. implemented April, with actively to the employees in number we

As employees April active number as a of to result, has approximately decreased current XXXX. our XX%, compared

or or the are our will variable our While have of of de-leveraging revenues on approximately cost, loss effect more the fixed two-thirds semi-variable. costs

also We will spending. continue to match controlling these efforts with revenue, discretionary costs to make while our best

economy to expenses to and cut in have business levels and LTL an people, customers carrier improving equipment return not ensure normal. the positioned Therefore, when as we we will capitalize our best that support we capacity We the to want though believe we economy. place on over to the are door

debt to cash first our have $XXX outstanding end flexibility. fortunate provide Dominion's sheet us million of to with the at quarter We're $XX totaled this the Old balance million. the and only totaled strength

on to $XXX liquidity with capacity needed. approximately of additional our also if of sources our million credit have We have lenders traditional revolving of we borrowing communicated line discuss and

our business. strong continue we addition, generate flow cash In to from

Our capital $XX.X the cash $XX.X share during of expenditures million quarter, shareholders quarter were first totaled to including while We $XXX.X million flow of million $XXX repurchases dividends. $XXX.X cash and returned million operations for million. first capital from our the

XXXX. of effective for tax rate XX.X% expect XX.X% effective quarter first Our was in quarter to for XX.X% as the to first our rate currently XXXX be the tax XXXX. We compared

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

Instructions]. first Atkins we with will Stephens. Jack [Operator And go to

you like sort just going of given do weeks? that rational advantage or maybe of like off So, what's very so to in this trying start maybe stable all loss seeing markets far I kind April. relatively and and it's it moment to hear take right issues our of about, competitive three, of what and to call in push certain at to anything a encouraging environment last guess Could trying or terms seeing remains you're drop general rates color talk there you thank with you there, for are market you the much over now. for that in back Adam And out share the share on in in on feel fairly happening customers is tonnage four that

this Jack, is Adam.

that are freight surcharges getting or much price bill. sense always down on every I the that think With just can customer surcharge customers be and of form fuel of a reduction regardless the environment. significance the right now, customers that it said, rate I back is of think on certain about customer's by pushing so some are the each

service that for So the the regard. us, discipline of in our reduction fuel each customer's pricing centers Otherwise supporting due had impact cost have made XX% important the diesel happening our is the the investments and over service. we've like freight right that in we've to and to years bill for philosophy and said the just critically now in the been we that that

than so competitive intention saw any really this we year. basically in that no of in what behavior last point, that’s at regard. And on haven't we had half really wavering this different of no seen last we the And

rate similar in thus companies those company So cutting we we some also recession, just one I that I saw been types we either. of announcing company, saw employee actions will at disciplined in through pretty have fact in things bonus haven't other the this yesterday wages And think financed you saw program think reductions that. far. And necessarily of had. a LTL like like things And, be lot and we past other doing regard seen a this point that

as just process So would to be their yield that with management suggest other will are. respect that that the hopefully companies such we disciplined

are this I up of my a into to you going market strong to what's of hear. coming then sort question, couple How balance that's the to industry for perhaps as take this? side probably on this the be great the CapEx into for even of you other to and such sheet, thinking guess about consolidation are Okay, more you you're years? a trying leaning follow opportunity guys crisis And next consider with of this loss we from consolidated emerge to guys reducing LTL liquidity. of on over this going degree what's advantage though make morning, some And

Greg. Jack, in our possible, service I capacity, this capacity all on big and future markets the That's and our that critical that so are But in things give several that years I the we've last we our over to different think markets terminal build metro is expand and network growth trying the whatnot. suppose. us to particularly done to trying

that we've might correct have we on it or done we to right we've to wait Where this. the as the prepare the think I I if Again, things. But through competitor strategy we’ll not. think done just comes go right to I lose the side, a be out things again, see. whatever think that's for other

investments us whatever is. on help it side our that I expenditure think capital will

knows? So about feel to it. kind on thing. really I Who of good speculate this want don't

to next go Wetherbee with We'll Citi. Chris

the the that was just And a say Is just we're shipment on a per shifts understood, think answer April point the make relationship? tonnage of to sort color day revenue. maybe little puts takes of just revenue trending to where than could given going to the imagine is of helpful and be that same yes. I bit fair it’s would relative give I weaker seeing? sure is to mix that clarification, some sort I want that But

normally nevertheless, we're a close is you respect some that, still broad that those XX%. of more are demand weight are give revenue rounded, probably open, the that which that, just our seeing day it multiple basis, But of remain probably driving is sense are than And heavier and the to direction customers weight been it, The per fact per XX%. has that products. Yes. day of But that in businesses per shipments customers’ the we're on which comments to much for guys. shipment what there's per for the almost is. The I than just open but down factors worse trending shipment to up mix some and think there's but

negative like March. in tonnage So, already to be on better, weight going we shipment reported effect have obviously per then trending having in big increase that yields the but is also what the seen is

we'll obviously So, of changing shipment dynamics of and will things per a now back we're handling. that your at normal right the whenever much seeing we things But start get some to freight more business across weight point to and stabilize are with heavier reopen, the book and so forth. board

Okay.

here could it then April of bottom bottom give the feels really of would non-essential color kind sort in but we helpful. had difficult of there? great. will activity you've as question, move sort to customers into seen of sort sort would have do through tell maybe some another of I potential just what like could of is so are That's happening it's Okay. shut or further but a or pieces or know, level be is customers, down what's make of be, late see business you from about perspective, volume that of the second difficult you the discussions like close be to where opening customers will there rest too and predictions down feel I I we leads the the the which is leg we the it's any to with quarter is and guess know difficult about, be it forward the this

operational challenges. as of our many our to which customers, many to the we challenges we're that either, reach We've those they're sure trying like gone of also us. all picking customers customers’ We'd reopen. open, which they and out expect think delivered But kind began present as to can't customers not open, behind where point. is communication of that to at that period difficult to and to trying We're Certainly out, so can. this are be what Yes. as initial of through worst to freight and tail are not this customers figure up

So, there. board, states I to American see the uncertainty figure continue shipping but there think customers businesses us means, I that are And for every process to But take for get somewhat the we forms will back may their to are open. what ready when normal mental of can we've start the ready is then our certainly, and got we to normal. we and go process through to a to are got and needs back get they place. think time across and out how re-opening to normal once capacity react if support new We've in get all increase when some

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

looks this sequential least sequential that? going XX at to time to improvement? a and you Maybe first to still be see speak that. that the revenues, given like OR to expect Would Just years we'll see you if meaningful pretty back decline could in

Yes.

I than is to think costs already trends will how operating just revenue second our environment. back But happens like first we remains than we the that ongoing higher with lower end. they’ve adjusted or good consistent even accelerate. the mentioned, drive but But of what that's the ratios operating uncertainty. or of is typically And environment happens are we function XX%, second we the few obviously, and still revenue higher where it the it's did at in end then be or OR the the lower, or say -- think XX% overhead this we say higher overhead than just levels give to basis is generate this of when first variable quickly adjustments. looking seen. second maybe have from direct a a I run over recessionary which I to quarter. if typically what point we The off. just the our improvement. those that than to we consistent costs to was be many cost to that keep then seeing we the drop spectrum can of last trending first revenue quarter But lower the try of XX% -- how revenue quarter, revenue think the close typically XX% it the what already, you're Typically, things the quarter quarter about our stay we're about lower revenue made solid. costs best And costs to Last I have averaged despite XXXX. years, becomes can probably XX% feel are as that versus improvements closer the revenues, higher in the been on that And our

got some So to variable claims within pleased that cost overhead as our produce But try costs XXX time haul be centers variable to new continue continue well. as and in our flex. direct got today. costs ratio We've to service high. XX%. completely that We've really that keep operating We're above manage. quarter. But first it running. did keep run the to And network the service see we remains to schedules our are And costs, metrics there own service line takes will to the all our not the there well those tremendous are we'll of

reduction challenges that of one today terms and of how a month service tremendous all is significant it half some in operating a and effort, especially how center there's So freight versus ago. takes was when

sales been the proud our that produced so the on in call adjustments April. operations coordinated able to of So that it's between side a see we've teams. we've the taking really far results We're and and effort

be for CapEx think provide sort scaled your But some just level? maintenance know And way if would been is about terms then to back. the could But And maybe extent about absolute you. are CapEx. of helpful. that I you we sort there a floor worse longer? that, How of an just just conditions should to that color that think in Thank that's on maybe of

will that any in annual into we the year that to real already that million. making on million Our normal already which the equipment the would equipment. kind estate cases growth see we're of to $XXX There -- as year's aren't maybe to included growth be related we of many side, the CapEx, years. investments some say plan over of million supporting would maintenance into the CapEx But of and $XX that has supporting already five delivered not be $XXX program, part today those We're next where next this see really been expect canceled, may But on we're that well. we year. only

so have to, particularly some capacity the and it's to do where been of in Northeast, the keep projects of So that some tighter, It's going for tough us in is some parts the those the important cases, the really Midwest, and metro West we Coast available areas. things. places permits get

in And process sure want back way years. a can to going volumes to that chance flows the for freight rapid this next year particularly when all to the later with of got come a so very come make forms capacity with but several deal we've we back, they keep

may what a also did few are efforts opportunities. with look be that slow process, we at years, on normal think next much 'XX, where in look like will 'XX period and volumes in we over service each centers, said, our But anticipated and the annual tight, we we for focus of our we planning prices our

centers reflected point capacity available into number work be we to able to we need today an our existing plan. gross at area in being how projects some the at would while service if they an long-term some about in we future, might good defer, that that and felt certainly then becomes look the we So, able opportunity know

Scott Wolfe with will We go Group next Research. to

offer help. can some you maybe Adam, So,

bad going rev just what higher the or -- means good And I we've shipment we're this? think ever or translate for of help good decrementals? for good up rule P&L, any thumb core So bad does maybe of to and it much for shipment us is be seen to decrementals, Good thumb like down. down per hundredweight this impact per of then as much. Help any sort it's that seen of about think weight weight so never pricing hurt rule how actually there? earnings? don't How per so does

But that rule know linear weight of simply is saw frankly, be don't before. really the and there we're weight seen would of in change not we've I in a changes per of end environment per just type per shipment weight it I thumb economy where this some strong. look March. a prepared and an it's terms how hundredweight. and gave per period you in of middle the where a to per in detail Yes. of shipment we Normally, shipment revenue of increase not The in say that the at kind in comments, when that in was might reconcile

in I about. some concerned that think truckload world the lot was was, was that tightening it places initially of like, seemed a

drive Our market anecdotal into get had some out. was particular payload a we and evidence to to concern for carriers able be not

use so, And just had capacity they to in could. were way customers you any trying that

so, away. And heavier maybe came some loads

Some mom-and-pop accounts of that of in be I that our were think saw closed. place, some stay-at-home we orders the might small put

if weight for are they was And have being mentioned goods, they I that business there accounts, an essential of larger as we're higher increased well. those. a like And so, the probably fact then shipment that typically more demand earlier, probably national the just per sheer handling

regard. every just shipment that we on were there more in was widgets picking so, And that up

the the revenue inputs what both then to then that's if profitability. we But, we know profitability, pricing and some of if the down that And in of we on the variable rates again every its own. affects how look And terms what account-by-account will revenue, That's in philosophy in stress basis it regard. at test customer it’s of the cost terms settled overall know customer, we managing of our must and component the how just stream try is. base each surcharge, stand fuel of

said, disruption That think face. the we've job despite those costs, as that percent we a direct mentioned done revenue I consistent our I in that keeping significant of good managing and somewhat a operating

So the we be just and matter in it all what big picture in particular, level like overhead of might type of of look becomes total of might in those see what like covered inputs there. on increases should our revenue depreciation elements the cost

to just thing So bad on revenue It's shipment, the shipment better a per shipment a usually per see weight you per overall it's when thing increase a little get not basis. system the a cost more be the obviously work same. what handle as fluid to through continuing the and now it's right up to speak. picking we're very just would with actually But the bit and network we

Yes, guess the sure still is answer typically not wafer hear I'm I mean, shipment I I good. right.

more there's for account You -- maybe also sometimes have which business national I think is bad OR.

case? OR I'll about that how would fuel, about think LTL Is how need to historically anymore? we about that should not this for can Or we the So, then And just headwind be that, fuel translating again, any earnings. to helpful? should additional thoughts a or to be we how to -- the do think color lower think on add still

the the for to our adjust that try level of most fuel tables to the think have or level we fuel be by lower. able profitability similar to higher or I prices part, account same are as

to different our smaller don't our thing, should national from to getting are picture one each down say standpoint. their any a from in the we're accounts, accounts we've on we're And we just operating the stand ratio, obviously, standpoint. is can what I but the said from And thing lower an right surcharges already that So now, regards big trying own well. fuel manage as costs only operating ratio

given necessarily not of with a our that keep items the we which a those got to flattish, we revenue right from operating any is right those if see if revenue, type just a costs, trying April. typically in revenue, can it’s percent that the now, XX% our business overall around any own weakness inflation might XX% direct in of as we then balanced increase one we more thing we're standpoint. of overhead to out having can hold that in So bad costs, costs of picture seeing But pricing big managing are if minimize

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

Thanks. Adam, morning. I ask the And Great. good headcount. wanted about to

First, about, I is you first quarter from is way that about think reduction that still different or year-over-year? wanted expense XX% you're of that expense a to something And right total the healthcare sure, the is than Is that make of still the about to -- the wealth are then and the what's levels the that? it third health portion is costs keeping? the talked

last some about down of that's of a last The we in had really like The the take on year. headcount decrease headcount that material the growth, attrition kind to and function in quarter's of ending the we any little have The X% action just call didn't of we could natural but year-over-year, a compared finished felt December first handle the just quarter. of that XX% the talked last bit, of so was year. to drifted kind Really April letting we were fact we place. continues

So in the were that what it April is down place. drifted but a number put bit, furloughs little reflects the

people to see back as got obviously the the network. place down, turn we certainly to in things we as that's event make of in number quite capacity we've much, and want in shipments. So But that the come not continue on volumes sure

forward on people how revenue we basis a are regard and volumes So, about we’re are with that day-by-day kind and just feel we to evaluate and continue of capacity. we'll and where kind in and good where our of move managing week-by-week

year you In That wages salaries we the that the about and regards about than first of a was a as We better a I percent of said think bit so quarter the to target. coming into little in XX.X%. XX%, as kind in had that did this third number the first said, benefits, about quarter. was

are So, around furloughed XX% probably since a somewhere is it’s a we bit third employees. to the maybe likely, to of covering XX% cost of healthcare higher, little

year. of tick this at target might So, what that up kind scale, that albeit of coming was our higher into and end the

adjust back snap don't can network in Okay. as just are kind see some that the then volumes you or That did my if would to within levers of that a going And employees other expectation kind your pay to of XQ tonnage bonuses the the along your same Thanks. helps. work to of pull have some then doing? that And forward, the there in look are significant you additional similar might of kind be for costs? out, for we you you follow-up, what lines, retention

We areas adjustments miscellaneous and as items expenses and are our expense general supplies already well. of some making like cost in

and very choppy. of the terms and eliminate we planning very it -- makes little our standpoint, easy, have each day inconsistent from levels a on it overall can of in was of the where is this levels, certainly makes I us news versus been revenue if if Greg week a that, So not things effort we're and kind in That prepared just revenue consistent. bit helps and makes it it of sense easier kind where revenue but good his think is making settled cost have in and every to and the remarks mentioned

we've to where been with we from pleased see that to here. continue revenue stability then and the we'll go So, see

we're day is and it But, we've to to you'd earlier and But a like now that stay to that something comments, we're and the costs like manage us against behind continue coming are. I under at going about our floor. hit point revenue will think it's worst markets whatever control this the beginning look that to and of our on feel into to trends some like seems we and each of and that the that's to getting every level top some well talk pandemic are we're that reopening, where

you on to, want share if you And bonuses? understand. can any don't thoughts I additional And

haven't point that about in at talked time. We this

goes. that we so. where see that we'll So, But have discussed not

Okay.

Todd, of way keep and in day-to-day, travel, of mind are are week-to-week a expenses that things changed on too, and of the we do down just a our basis lot entertainment, down. because like some marketing our we've expenses

that expenses that in we all certainly our bottom-line a when of So as incur of things usual. and will we off done. help normally awful lot business turned there's But have an that are lot it’s said covered

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

towards a and could you or per the basis? if And more that's there is. on kind presume shipment. even on part a end there. weight Is more more goods? that an tilted a to hitting it up little of retail could, you talk is Scott was to sustainable your question, those about And to guys essential just driving of kind business ability I a the then desire I if just on the first markets, increase exposure for my So get maybe I But of more know this. clarity wanted mix little

in April, that, first of can good into as has say food Not It's business. seen agricultural other any And what the difference medical-related seen retail-related in necessary the of growth those exposure line. that or we've that well. things in chemical-related got just change we've as would in manufacturing trending, regard have of products Most imagine, I that to been quarter. of trend distributors would somewhat or we things any go certainly food and what in type kind like more were any long-term we’ve been type of for saw you and on those and types that and

kind that's continued will, the to performed if that in areas us So give you have have and April. of been business,

you about things can it's that While of be and continuing just think be basics sort open if not. are that the in other moving or business places -- some might products for the terms what to of

type be long-term, retail respect said as not we any with we've times, of continue having more chains But some a change. type throughout on of wholesale of be or presence that of effects been think carriers those but And e-commerce will much towards types where that to has of there the of nation changes move place on change -- we'll to the kind So ripple supply levels. and how and focus offer that supply are of the in service the retailers -- making higher chain. that multiple

that and place. recent of in for levels our putting customers our avoid helped And been many retailers business that fines like tailwind service that, the in our so that's fact years. And many a charge backs are things and

the That's you down truckload could on seeing the carriers. this of to still kind LTL then, which flowing on of my Great. And side. elasticity seems for rationality elastic is you're of the pricing a is just think movements XXXX-XXXX LTL in extent see for weight as whole? typically, truckload period? the could then to LTL an compares But maybe you shipment, the pricing And if kind with how about that how there's said side, talk that's about you into kind side. you truckload you like some pricing pricing talk the But follow-up, great among you when maybe It color. carriers LTL per higher on pricing for the collapsing industry think as

Sure.

still at at freight lower it we a than really, been that you entered now, didn't -- but between drop faced that will, if recession XX% The was it in we was what about and the soft, 'XX the of in the its sudden in we the eased down revenue sort didn't we we we in worst of obviously, to how quarter. bit levels of I of really, those many kind typically it. or continue to got we 'XX, X%, see and to X% think And some just quarter 'XX see. end of XX% of drop-off And we had buildup down in and terms customers in deliveries. of of necessarily was to of of off end and April. end into kind make the the was, XX% drop orders first in it then get a it may quarter quarter kind March, second we In It the chain, somewhere then expected. March. But of 'XX, went fourth a little And have

from March towards held will, we normal end missed steady, the of middle if end of kind just of somewhat buildup. the quarter and So you the

now, service rapid be we harder and as of to able drop-off service in much But of high. of remaining XXX and our we change April, the metrics and it's type anticipated, centers that network keep respond fluid kind to to saw and the to obviously

miles. operations minimizing out costs, been empty really the they've I've these team So cutting how impressed adjustments with and made

technology team of in but lot has, of productivity that, a and that's the running how team we've system kind that not we're in manner back I lot closed Our much and is all customers to goes our and dock a up. as job plan, the it experience, of lack become to us mean, you intelligence, productivity able fact off ingenuity with that our the challenging keep got efficient just P&D when cliff artificial well those a and and and got more of place help our that has stops, difficult really just over we've been of it's revenue function good that human years experience to that falling things some efficiency. makes are abrupt adapted pleased of the very quickly it But got is like you to the types think looking between more half. about a miles these changes when it's

if a ability And the LTL on side? protect the as could on industry collapsing whole the pricing it's of you guys touch to maybe truckload

disciplined. and be seen as think recent would to were LTL going we in we we've believe when slower years even in XXXX, that that to I continue back

look year, out in carriers' try being the XX of Just really with it's revenue volume. consolidated it's the trade the price not so many this a fact, And XX% top margins, go in of carriers. really to then at you to position that for in and when

In an fact, their try to and it's better to of more profit out try probably increase levels. implement go to shore up to

we'll consistent, year that with spotty issues more and pricing held fairly happens and even times. and felt in continue always like it's dealt see spotty faced those. that last stay And steady. We would issues, to we So some LTL good

sure supportive to obviously us the frankly we're over So demanding that and to technology been us to cost is infrastructure that critically customers support make offset increases we support to to investments price It's getting very well. as of believe important. pricing inflation years support to continue capacity the investments and are that our

like And cool. truckload We shipments And the are when believe freight to less to do that. network is ridesharing conducive drivers dip not world. some than with a discipline to customer the we not LTL. move riding every they to that and that So cost you're Group, even really out truck and customer is was cheaper aren't were of multiple it's before the and benefit are. of versus we'll by their ours stops like by the doing XX,XXX ridesharing is pounds equipment on make Their sharing moving try other And down of the freight. relative there's sharing to continue multi-stock still see paid

So the I to price, industry respect think speaking. continue we'll to with disciplined be and relatively remains strong,

Ravi to Morgan go with Stanley. next We'll Shanker

Thanks.

morning, good Greg. So

a what bit maybe this is SMB are your in You guys customer and versus but able percentage quantify of your to base versus customers you referenced commentary, little nonessential? essential large

-- about contract and but Well, degree, we've nature. customers customers, in to of we're moving for certain all now. it's our But That's be right closed essential -- are terms that essential, essential. I non-essential, some for got you smaller XX% say is versus certainly, right about and mom-and-pop about accounts And are if going those are the most we've business larger now. type of got I'd down of will. in probably a XX% And then mean, everyone's seeing to just for XX% overall, about part

Got it.

your your perspective, you're perspective. Greg, So government from would saying but obviously, from not customers XX% essential, of a be

right so are now? stuff of actually moving customers our And XX%

they haul a And exactly accurately roughly trying is whether don't to in determine what we haul, that not. actively on fall we've of we we essential something place. that But got all not. or know lot measure But we've case. we're or everything the it's measures That's it's everything exactly groups that We if just essential working that cannot into. different got

side, are to as the of of the supply catalysts carriers, comparison clearing sharing impact maybe TL on even which LTLs insurance kind some to again, And big pre-COVID whether and it's mom-and-pop of 'XX just that's while shifts on some share the of restrictions into referring the the just the supply -- house such. focus side spillover commentary side the for or well on with lastly, given by a and side effect environment? bankruptcies costs, LTL coming the the back you any driver some accelerated worse Obviously, XXXX about with obviously year made

We I know many side, is. thousands on than closed, carriers this of closed. some truckload read the and that a thousands week. truckload There bankrupted But that how of thousand drivers. had were article have as whatever. that most there's I'm just less or exactly XX of you lot not are sure couple a know, that like

away, gone know of some have certainly and on but we So side. LTL seen closed those haven't the that

And Ross we'll go with next David Stifel. to

fell you gets over maybe X%, little not and you being weeks a got see talked when it you guess worse just didn't I see months. mentioned, it down Greg, Yes, you a see But into Adam, drop-off off April then things and March, cliff. when bit guys a in the and a about normal where it And shifting span you from of downturn around the go of of what or it such do of a with in period terms the I how react are in network then XX couple do you XX% you the down days, short or mean, flat you Greg, seeing a things in percent time? hours what in do to And to volumes? down a that? few you

of of the coming the see mentioned quarter not because, was the end Well, good end XX%, It question, get not the would we the versus that month, get. end sure, Adam of to I'm XX% it We was degree typically Dave. could of normal as some quarter. maybe end it off. we like did normal before, month,

weren't And were obviously, in hearing the as that shelter-in-place all saw we kept about issued. orders dark. these it coming, completely we we So

I think something had all states, that. like XX, in Certainly, markets about the at that XX that. to gone time, it the covered country major

deal to trust time. had we with we and me, So information, ahead some were prepared of well it

to look wanted adjustments a the of of finger, but snap we well some a were got the So us prepared it all thing. we've first and and lot to we'll so is need the that And decisions. continue we the customers a first and obviously, month. But out measure, were lot of that made in make flowing at and kind the information that we We've make adjustments made out there And to helped since there that information the do a of we month. we do be. of the if couldn't at that at with of the all closing lot of

wake on when you at the one two What one or you I focus Greg? managing variability? look up What in of guess, volume morning, through terms are what or it and do things two this the you the that in the are first

We we you've measure somehow a level at to the different to levels the tonnage, well. those where levels. done it obviously got all the region measures, it shipments and Obviously, all on things, But all as revenue workforce have look We've company we'll shipment try those to are. the we compare level business before. see things, a

We the in So it's not new. year. through similar fun, anything downturns but it's 'XX, managed it smaller not 'XX and through downturns,

So a it's to got we do different, but obviously, little it.

not can So that. I fun, tell you

you ridesharing guys money at other the the least unlike make ups downs. through Well, companies, and

So congratulations.

Thanks.

on. is we've and earlier, going close tell last particularly, mentioned of think, conference on so, building within board walls the you, team. a I I We've we're over doing. and Adam and can And numerous tribute it's everybody what So the as to calls worked numerous had extremely lot again, with meetings month the the or a numerous,

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

mid-call. I got disconnected

transcript. May completely just of was the Adam, know the trends back shipment it question asked, it shipments has June? helpful my kind But you normal but already typical would to and just be me sequential let as I from of this crazy, hoping to could know I see the in just to sequential kind understand go you So provide May, seasonality if been historically? it's April year, the to that I'll

-- April X.X% May. April, is X.X% than X.X% and typically shipments than a higher Sure. March, basis, April day per The and higher a than higher on shipments May is are June

just so talked then about? shipment. that number the that sequentially And you down that that sorry, is that you've XX% in April seen what was year-over-year in seasonality versus -- far But normal

down for if put XX%, are Well, really would about a sequential, in that it versus for so calculated but looks I neighborhood into levels about somewhere the XX% necessarily shipment things us March. how hadn't of obviously, or down

program. the impact other little thinking that may to I'm per comp just furlough the about point headcount, on inflates population to then sure the program something there quarter. if employee? that I that nuance the and ask be employee, Is be second wanted wages impacts the And mix should in wages any we per not the

the Not on we the little will, of the of higher be the percent fringe higher if wage the that you a salaries did side, of bit will likely talk about wages. end at those range, a benefits right fact benefit the are our cost they so covering will as normal we and

of that? kind I'm typical move just think about help way I and then you of, given like around potential network. great you given the that's of trucks running and incredibly a any about understand can record. thing from the kind guys efficiency, And efficient the pretty of us And you factors as numbers the is, assume I help network. But Okay. efficiency there high think those great kind XQ, of line I obviously, are change to or a any factors a one reflects have period reputation as to period? trying And an we load is to haul how any XQ track how load want are the measure change understand partly on in full the

daily Unfortunately, some. have load manage improved load watch factors Obviously, that basis. is far, something month the so factor and we a actually on to day,

you got closely. down. all a But our our multiple where we end mind manage we in You've cases that schedules have month-to-date, to in that of keep have in in factors schedules lanes. do up again, reducing those some very load And cases, lot And of we're shown just fortunately, improvement.

is effective the that is one are margins? best piece like the Or it, for that effective an proxy but just trends? -- just that margin moving is many overall proxy to so I'm parts understand, of load trying for that there other factor Is

okay. miles load key is have aspects well. of look kind We kind so But line haul things. or that factor a factor by. look at those that it you the I I of thing think empty different miles, biggest looks of But we think all certainly as at to and and can far, manage thing

in lot have should to of Okay. is per And very is, about of I then question the the context margins just really absorption? weight question. there's quickly a it fixed cost per I And questions last shipment isolate want and shipment around and how weight for think Adam, the we

a shipments? per revenue shipment per so how shipment, managing with come you're obviously, But the shipment, revenue associated trying basis, revenue to all equal, the were shipment from to you So makes on think equal. margins weight to to in expenses on because specifically per higher, guys obviously that higher really conceptually about shipment But isolate that. else just translate sense. I'm weight per weight keep if does the changes will that the per disproportionate drop-through expenses we and manage shipment, translate with And pricing obviously, everything higher revenue to equal, will

in around that Yes. I the call. earlier talked

later. either point follow-up you So back the or I'll to can we transcript

next Baird. Ben to Hartford go with We'll

just quick. Adam, real

variable perspective trended? roughly provide over Can to Is or that figure like You and And how internal that years say number, little two-thirds five so, that risen over it time? is if time, density? looked have costs? cost mentioned it a of just ago? would initiatives that's being why variabilize you proportion semi-variable. Has bit XX What

which the time, level which of direct of are come that operating most over has in costs, Well, those improved, variable. most we've the operating ratio improvement

that made stayed our of of revenue. revenue. So relatively optimize an process have quality cost technology process improvement tried overhead we've and got and costs our and try always years, we've efforts in on focuses a But labor have we to on a efficiencies, as consistent improvement improvement just always, mainly continuous to general and history, work a the as percent operating we've percent to over improvements through

be area which for takes for just continue long-term But a have And And improvement. the focus. are that's right a like it got an that's will you've operating the ratio It now. opportunity focus. obviously ingredients so to that's been where we we density, ongoing operating don't improvement ratio feel

to tries our cover process And inflation. then a yield improvement that cost

to it's improved. improvement. macroeconomic And network. efficiencies too though. support, having over then so we've been density operating yield Both and That of through time, drives additional just definitely that require the that, But And leverage able OR the contribution those the there.

long biggest of improvement the operating have area run. been Our costs over direct the

to that that, has has as fair it Is density the built say risen, that over past though? proportion decade

Of variable costs?

Yes.

been I as revenue. don't we've know that where in area costs certainly of improvement, though, it's It's a risen. to get able an percent those

Okay.

with, set, your you two, the customers XPL that the month or total business on XPLs you as course changed percent Just have more customer seen that active the proportion meaningfully of business has or over of past do the less? a

probably It's little a early to tell.

completed little a even one change It's they've probably of haven't month had significant We a tell this. or too soon not. to if

with And next Scott Wolfe Research. go Group to we'll

follow up. quick the for Thank

potential sort now competitor. outsized think And if of share about you to there? given right we the if curious have made you or from any a share you lose Greg, could if any sort And you're share just thoughts something or a guess effect that? in I'm place comment maybe contingency or of earlier then So just of concerns that any you that on competitor gaining anything plans like guys I

from don't to begin should gained know. we've I last gain additional a We competitors' more at to point. Again, Again, the certainly, down, business is want something our prior if think I say this anybody down, over three we we share gain suspect pandemic than have that. our of say we've can't share is we're I prepared share, I business weeks gaining several most always just similarly say ours. been to far. through I Obviously, tell I sure in this if anybody business of from right not years. the so from any some to this I'm couldn't done to relation standpoint at But of being any things happen, No, to as said But point.

our capital you over particular. to of the several this real in well estate. in estate year that we've investments are the in I think expenditures real aware all made continuing make years, our last We're

we're about hopefully, coming could think back be. business, doing the we So than We're soon right I things our losing concerned to as prepared be more possibly competitor. a as

see we on we'll So But really what happens with that. that. don't want to speculate

there like any no to back further And questions closing additional in or are Mr. over I'd remarks. turn for Gantt queue. to it

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

you Thank your conference. today's for concludes that participation. And