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ODFL Old Dominion Freight Line

Participants
Greg Gantt President & Chief Executive Officer
Adam Satterfield Chief Financial Officer
Earl Congdon Senior Executive Chairman
Jack Atkins Stephens
Allison Landry Credit Suisse
Ravi Shanker Morgan Stanley
Scott Group Wolfe Research
Amit Mehrotra Deutsche Bank
Jason Seidl Cowen and Company
David Ross Stifel
Todd Fowler KeyBanc Capital Markets
Matt Brooklier Buckingham Research
Ariel Rosa Bank of America Merrill Lynch
Chris Wetherbee Citi
Kevin Sterling Seaport Global Securities
Ben Hartford Baird
Call transcript
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Operator

Good morning, and welcome to the Third 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 November 1st, 2019, by dialing 719-457-0820. The replay passcode is 3218857. 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, 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,

Greg Gantt

Earl Good Adam our who to morning quarter is third call. Senior me from a our joining and is on and today call Executive our With Chairman; David CFO; Satterfield, the Chairman, our conference Congdon, welcome Congdon, Executive location. separate

Earl Congdon

Good everyone. morning,

Greg Gantt

quarter for service, environment. while demand third emphasis placing others rates. take carriers fewer Old challenging Dominion questions. the simply than softness on our and the glad XXXX, normal, have with other more delivered of your in brief reflects and lower some to customer be some choosing continued will volumes operating financial price we in After versus results as be may remarks, shipments in Decrease solid the of spite

for straight of the revenue and As first third a when per for the to year declined XXXX. LTL since second the quarter quarter quarterly compared prior day declined the our tons result, time

quarter operations of each impact help in have operating volume improvement we productivity yield ongoing decrease to loss of the in yet we this density, bottom-line. our the resulted and year the our the Continuing faced that mitigate in has improved still

We to management, which is support operating density of path require operating the growth of improved believe continue long-term, between environment, balance yield both a the productivity. the and with to along that favorable profitable

P&D quarter, I dock third while was see shipments hour pleased hour X%. the to increased per X.X% our and improved our in per shipments

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

we always maintain is performance. productivity While a our it imperative that best-in-class is service focus,

on service third our front remained delivered the X.X%. with ratio this team quarter on-time during Our while cargo of at XX%, claims

by ongoing center this performance while operations. consistently also on improving is in our critical do yield, with and our which ability our to that employees efficiency customer capacity to customers. the provides service We further This technology and invest focus us our in of support improving service supports the investing demands,

provide the better team We our to and Our investment, for customers. family which in however, necessary our in to OD be serve tools benefit with improvements became continues September, while the effective program, rewarded people. our wage to best the and to continuing training

supports long ability term. our market against to unmatched superior balanced approach network pricing, provide with increase cost-based proposition provides value over the and Our share to service consistent capacity, that an ability customers our to

LTL service Company the value-related Our ranked OD in us XX the named survey, One value the for this latest validated XXth of straight proposition recently & number provider XX they measure. and year. National attributes as was Number shippers one In as Mastio

our superior decade team This day level hard made to award-winning provide employees helps of individual possible their to work customers was place promises. our every for performance our was best by which motivated who keep in of rankings first dedicated a A of terms are of service service, categories.

The continued us plan. confidence and by our in team our execution strategic gives in results, consistency financial long-term our

economy, continue control on price, we investing service for we disciplined controlling the will superior the a to costs, can't our plan execution focus and at future. fair While by of providing this

will may but have long-term short-term service occasionally ongoing a the that such results, so decisions negative Doing on investment require vision our impact in capacity. center as support

strategic Our experience we strength help economic know plan investment are during thus win that market share us supported of by will strength and returns the shareholder We create generated of long-term value. and consistent consistent decisions weakness. increase growth from both our the financial and execution have periods our profitable that should

now and this quarter greater morning, third financial our Thanks results joining in for Adam will discuss us detail.

Adam Satterfield

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

The third year so this included quarter basis one the decrease workday, a per-day was on of extra X.X%.

in another Our operating increased in We extra included pleased ratio XX.X%. operating sub-XX ratio were our to the results. environment, to especially costs, considering produce some of challenging a

our revenue ratio, per X.X% With to operating earnings decreased in reduction share increased the $X.XX. and diluted

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

quarter with surcharges, approach consistent X.X%, line which was of increased per LTL with revenue in consistent expectations, shipment weight XXXX. results more to to our These LTL our comparable fuel long-term, are Excluding the was per yield as hundredweight pricing. third

below day quarter of average X.X% XX-year decreased LTL the and a per X.X% the compared of day as compared seasonality. LTL day LTL increase normal shipments X%. were X.X%, per to per the XXXX, basis, of were XX-year both day average increase tons to to shipments LTL per down Compared and tons On second as sequential

our trending the as tons performance normal LTL I results but August that September are both day per seasonality, seasonality. tonnage down for per day essentially a in At view line This with this slightly were follows and X%. is our considering months. this to below past sequential revenue X.X% our XX point normal positive, October, over

for third surcharges excluding October, per fuel hundredweight, is lower rate the growth The our growth trending in quarter. than our in revenue

quarter step slight third XXXX. to the a growth fourth comparisons of expect tougher rate, due from down the with quarter We

growth ensure we our any slowdown the that philosophy. on in the comments not pricing to to to quarter Similar as we this rate change that misinterpreted second is a made want call,

usual, provide actual XX-Q. As October our revenue-related quarter details in the Form we for third will

XX in points of operating Our as increase cost more to increased XX.X%, costs. than percent direct third in unfortunately basis quarter a improvement revenue, the ratio our offset overhead the as our

many the our deleveraging Decrease basis in in overhead costs, reflected depreciation. had revenue as a on of increase XX point in effect fixed

miscellaneous our compared when addition, to of third points increased expenses In quarter basis XXXX. XX the

structural and disposal to account of the was slight for largest the this as the was within $X.X loss of and million to a assets in equipment, facilities. quarter compared of loss service this items improved property several room XXXX. removal a maintenance net third gain increased, to create center on While the related of Much

the $XXX.X from and nine and in In Old expenses regard cash for supplies $XXX.X fuel in for resulted while prices flow and million months year-over-year of were lower and productivity, quarter Dominion's to third being and decrease our gain $XXX.X has of totaled our first the as million costs, million $XXX.X periods. to operations the we revenue. continue direct million respectively, operating same capital percent XXXX expenditures a

the million to We months our $XX.X expect for the the year. continue this capital of returned to of of million and for $XXX year. during first total third We approximately nine capital $XXX.X shareholders million expenditures quarter

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

the the effective for quarter an XX.X%, from in fourth rate compared XX.X% XX.X% third was effective tax third of quarter XXXX. the We as rate expect tax for year, benefited Our quarter the tax certain third discrete adjustments. quarter effective to this as in XXXX rate of the tax currently

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

Operator

Our Atkins with Jack from Instructions] first comes Stephens. question [Operator

Jack Atkins

good my questions. taking morning. Thank guys, Hey you for

challenging. So I or seeing of guess terms October just to if to just But about prepared be your you know could things kind seeing you're the would on even October. seeing in far number you considered? thus going continue if general the in you're trends to seems comes and things get are of Adam, Greg going I October, of give what in all in just trends when take fairly your what curious holding like how of would be things a guys data industrial pinpoint curious, It sort be macro comments stable, I sort there, business just though out. continues broader to to you're are around more relatively there, Q just talk and back feel

Adam Satterfield

everyone showing be some noted that Sure. stable. We weakness, that are continuing obviously and have the actually are industrial now but some same see else information our the is trends does, to This numbers macroeconomic Adam. of

quarter has would And on normal stability of seen year, September isn't new first results with quarters. October August I've say we're seasonality normal the this results As from we're And have we and mean October below is, than that seeing, we're every what were in I side that it follows back a I granted last been. going thus month in our of with our mentioned, while the but by well trends in been basically would roughly July at to be. seasonal line what month seasonality more standpoint with far the that volume recent below, line What the point. finished, have and our

as to hold well. our are sequential That's and continuing good see, a to obviously been yield trends standpoint from steady

into going yield third As hold the similar that quarter, expect even in the you rate if slowdown the what sequential constant, of bit XQ. did fourth quarter little a and we just might assuming we mentioned, little a from acceleration growth bit in we to mix

a in seeing lost bit is, some we're to I That hear that this little be earlier year-over-year stability business weaker, we're we think that more change of and may year. starting but more

coming a we're is and but us. cheaper have for to the been trends business price, so that for receiving, They they good with back have were of to of this dissatisfied some have become those that to see. level business Some of service left maybe win us back starting may

our of fairly a we're was while little stable. our have in earlier weakness, year results see. when It's to been been good the numbers some economic now maybe and are bit weaker, economic the showing might Whereas data staying results the stronger seeing

Jack Atkins

broader very pricing, yield his for six or that's we relative months there say, on interpret prepared how guess my in Adam should and comments I to going the to encouraging. your Greg's remarks ago? I ago Well, three yield. months today on environment guess just I Okay. follow-up, comments mean, back

some changed look anything months? opportunities there after, to be know I or over if seeing curious, cases, less said at margin seeing the in some go more competition sort marketplace. the Greg would he's of several I just has for last any that, lower you prices in shippers the on yields? Are

Adam Satterfield

more any has intensified, that changed. environment anything on perhaps and want to, We like label to careful used kind that certainly, that. don't dealt earlier were know to and we a But maybe first quarter don't year in characterize we it. to, with we of I necessarily competition put noted not this try late the

certainly on unusual hasn't that's It forward. in And had seen it's I an we've any continues the at that our we’re that's demand be periods and comparison what Greg's reflects getting there and comments out the really just at. in to competitive, there. changed But And think not point that that before. impact to softness volumes it's

numbers. want. But really ability to in that. certainly, that with pleased get environment our reflected we been our I supportive been the think That's has continue of very the increases to We've

to working pleased have, And with win-win team, together, really out been create we the to sales relationships leverage our I see that continuing we how figuring working can scenarios. think pricing our our customers, we've teams,

that's as well. think our numbers reflective I in

with that but Bee takes Real the relationships. and Bumblebee those leverage in not happy it people Prime the have, can we We're people, relationships Gogo only that that do bots Optimus like to movies.

Jack Atkins

makes Adam. much a Appreciate lot Thanks time. that sense, of for the very Well, it.

Operator

Landry Credit Allison with from Suisse. Question

Allison Landry

morning. Adam. Thanks, Good

wanted you So year. your you the volumes I to stability and lost the in mentioned, about October comments in you're just of I customers back the to months. that earlier I Adam, -- in last maybe know couple regaining go

color perhaps regaining this you So these normal when it sort on to broader share? attribute And that? sort could more Maybe of it's stability of would of lost in about give not of trends, a little necessarily indicative us we environment? seasonal you the think bit if

Adam Satterfield

which more to trending revenue and that's than about point. anticipating it we're because into our them the negative, that certainly, home not positive, anything rather coming think But at know, it's we'd necessarily we're year. seeing anything, I of levels be still certainly you this write

existing customer customers think to business shipment year, just getting are we've weak, last But they that continuing of to certainly us see demand where levels that Greg some I the all continue trends lost. that they And not be be overall that reports we've more may were fairly regaining recently by been but have have been year. been mentioned, as

been little there. there So a has weakness

that business that But bit had in a keep the year. overall, continuing and think back earlier to winning customers we're in recent maybe months, perhaps I with of then been little existing business lost

Allison Landry

Thank that's Was is this that to And normal you as I then, I the Okay, just than sort a how if look QX? may would the higher, helpful. for trend line, driven historical trends you. that have can deleveraging you mainly give any out, at then contributed us there that? factors think, sort of would are to of by a sales call salaries on any sequential percentage or about And other of think thoughts bit the the and little suggest. that

Adam Satterfield

look benefits, some pull that you I gain and the that to we productive wages at there when of you that our we and were salaries the a improvement think able was those the labor during productivity and trends, apart For lot saw quarter.

When thinking fringe related look Phantom about to Program. sort the overhead an side, just then we have our of benefits, did increase you and in Share the

XX% in a last fringes percent XX.X%. of were of this was quarter salaries quarter the overall, and year third the wages year. third So It as in

that of with our from drove will, costs also in be. had the was increase, line which year benefit you what and year is second standpoint, some rate fringe I this higher. a at in The estimated might that for, the reason So of a XX.X%, were the if quarter quarter-over-quarter sequential why was

third think, higher So if price entry there benefit and $XX about that and program million, bit that of But of $X was over I this we share million, little little understand certainly the $X.X the certainly increase, that on so details headwind. a of were we expense the increased quarter quarter side, that will, Phantom Share, an had last third with Phantom our a most year with how the fringe the year that you and of of which stock during created in quarter-over-quarter a of works. people, about

But fourth fringes. typically that could quarter, several impact going the quarter adjustments includes the into fourth

that year we includes compensation every workers' was our that so is, those favorable. of One last study the adjustment accruals completed year annual actuarial pretty and

percent above. Phantom and in cost benefit a Share as Then it's favorable entry last trending that period. to year now, our of we in quite well, share salaries quarter, wages XX.X% if related Right the so had fourth Program fringe our a price were as hold, bit a our continues to

above the I this think third the quarter of $XX so was. at we're about or XX-day average of end year moving what the

will. if Phantom be. the XX% have increase fringes just adjustments So to other of there our expense in expect what would result that evaluate kind and be stock any you share absent any the I to might range, in adjustments would price then we'll But in or way kind those sequential one of other,

just significantly, that fourth operating of I adjustments benefited the points. by that basis I mean we XXX got, about quarter ratio had we several XXXX, to pretty favorable So the think, comparison

Allison Landry

Okay.

full or that Just that's XX% the number? to XXXX clarify a for number, year fringe, is QX a

Adam Satterfield

in That was XQ. Program, of for changes workers' I actuarial the of but year, and what I the my Phantom full would absent expect for on mentioned kind like Share adjustment the guesstimate baseline for any that's comp the

Allison Landry

Okay.

Adam Satterfield

it now stock Right than on be period because quarter have if the higher that, Phantom price we of another where expense. would share based is, the closed big we'd much

Allison Landry

Excellent. Okay. Thank you so Right, much.

Operator

Shanker with question Morgan Our from Ravi Stanley. next

Ravi Shanker

such pushing guess thing? you you discussion there do the is, In gentlemen. are Or question price, on morning, is too much I know guys no price? the on Good if Thanks. when

Adam Satterfield

then improving that I approach. think the is, side customers, our in the we sense other and a we ratio, at have that help every need, operating if from think increase inflation then but an and cost pricing then I things for maybe look get specific that might us with customers and we we we philosophy is certainly our talk the customers consider on always feedback objective we type year accomplish cost-based what can that of to and can there our profitability our of change account our at programs work individual with Ravi, When our look customer. what a and operationally we we cost same also maybe on are ways the

value just are so the But efficiencies, to would drive then think Those things anyone, overall with our service hard we slight as as think we and the we charge against quality low the proposition premium. of basically cost that maybe approach. to rates, better that rates that work balanced pricing a it's with given and provide through, structure possible bit work certainly we equation, than consistency market in very line operating are our when at about you a value the keep

Ravi Shanker

you implied that coming this sense, coming you thing? What's more folks this from they're any Are service that pricing? customers getting detail are on Is a old hearing back? you Got or on you? it. is the you And lost some ground, them back. mean, driving to your are back of a I why

Greg Gantt

can't In with product value Ravi, cases, because the been stand our they simply service that it's service is proposition superior. they've getting. our some

come service isn't price they they the so us. that get, worth back Just the to

Ravi Shanker

So, again sorry, -- go ahead.

Greg Gantt

And price. I that that recently. at was attendance So coming we’ve in I we event had it business our yesterday have heard a few one seen reps because of account actually had. and so centers that we lost service in of again this very national yesterday we back,

So from it's standpoint. I that very positive think

a they so. had, tried It's way they and It's They day, well the rely price, we to what bits to continue that but go every on business years, proposition. the returning been it's us our again, pieces. then value back, they over It's served for away years. and over not cheaper love massive come and

Ravi Shanker

great And that to in happens to that that might as is it. down Got cycle? kind something Meaning, the inflection? in left imply the a you when my see a cycle? mean normally of that's an guys I question. start come we few for back, this where does you be use indicator some segue next first Can who

Greg Gantt

if it we've know down in seen with We've the It I don't and that in or project past. does what but a not, happen I cycle is sure. for over this seen happen consistent over. can

Ravi Shanker

Got it.

a Just cycle is years, more is, trends printing and floor you've the a like many sub-XX this outside you’ve it guys a of again, still on done ones. housekeeping -- industry in couple than on Is now? of you sound bearish probably One have and and OR ORs. recession fair say to your that you're right

Adam Satterfield

make over know ratio. I continuously that the But density improvement continuous term guidance call point we want this talked operating and takes give it just our certainly, on the and we've any consistency costs. our don't our that our offset ratio ability and to operating yield about long to to at improve with

certainly reasons, for related those faced this probably growth heavy We've our little to regard. had higher some density that and for and year. that of a we year, this lacking we're fleet some in costs we're And multiple so planned for

into then but just our as environment the some us So us. we're we'll we gives and definitely higher demand way with carrying opportunity with that cost, deal next faces whatever year, work

think have is, kind but I and when plan and we've operate upturns the with is be economy. there ensure service and growth, footprint has step certainly a that the strategic of positive certainly, guided got in economic and the to that's when but in investing to situation our our inflection through looking we're we a ready of legs of we're to out to deal forward building able It's happens. to capacity just always us next But matter that willing and downturns whatever center up

Ravi Shanker

a what is If million I those it. Are number? in, the items expenses $X.X one And called more said, just Got the you quarter, squeeze can miscellaneous for you had rate out. of Adam, you the including all XQ? normalizing in run bunch

Adam Satterfield

they point that quarter. tend we miscellaneous quite I should related expenses back of in sort a to bit certainly revenue, that, loss those repeating a are Our type to that's X.X% But above and go about that pointed the fourth would in more of X.X expect around event, line. them of not to average so out.

Ravi Shanker

thanks much, it, Got very guys.

Operator

Wolfe. Question from Group Scott with

Scott Group

Morning, Hey, thanks. guys.

Adam Satterfield

Morning, Scott.

Scott Group

numbers help tougher as you October get down tonnage with on just And the can think, you easier quarter? of you then X%, us comps and shipment? modeling we Adam, as do full the give per just about weight X% think us quarter, the the to revenue or balance look monthly at can

Adam Satterfield

you're tonnage. Let about talking or me start the year-over-year sequential with And changes?

Scott Group

year-over-year. with good I'm

Adam Satterfield

for in July The the shipments In in year-over-year were X.X%, July, X.X%. That's September tons was per down down September. per X.X% and X%. day was then day. in down and in X.X% X.X%, it it down August, down was in down August tons The

and look of number terms the at that of of really September when that comps XXXX, certainly In numbers goes in in you fourth kind and was when our of the back overall, we quarter of back the started kind comps the of go the some to flatter rate XXXX. growth going in particular, tons

versus So our that just in growth period rate then that XXXX stepped of got where comps to our XQ. from and was kind tremendously revenue XX.X% harder XX%, XQ up XX% that significantly

harder So this go in little get bit got easier into year, comps last XQ as in a regard, that the and year. we they

year. mean continue bit watch just year, you we back the in that the I half we'll a and through progress So with even will harder get maybe if a normal trends, XXXX, start to line going of more if and can seasonality, get certainly, then easier the somewhat consistent into bit we little in be little to as first comps closer

Scott Group

understand coming incentive trying as you why X%, headcount flat? think, wage accruals? the discussion labor X% and on appreciate Is we with is I look typically and I'm I earlier. sequentially? grow anything fringe If costs Is increase. that's typically labor costs help they sequentially, going they to did labor flat, to down were just Okay, Total there flat, all on helpful. the increase.

Adam Satterfield

trends. but was our talked up compared, quarter, always that you're lot but day-by-day, in was to kind a we're on overall we're labor peak a average X.X%. the if year-over-year there of of down third thing. something October headcount, quarter a in last our second and was of talking employees That's the number matching from revenue we've decrease minute-by-minute It But a standpoint, that's sequentially, that year, in slightly, about,

When the September, you look I about just September think X%. at decrease is to

So, continuing X.X%. and then has that on sequentially a second day-to-day we to from just the quarter, I in basis, that think third down We're were to the attrition on have place. try the based dealing the about some with labor volumes we're force and taken right-sized

We've And just Wouldn't those down. quarter well. continue any fourth the of material into quarter. just that monitor as to progress as or positions, of headcount necessarily not will, of expect fourth filled quarter change, we kind third to drift if from kind kind of flattish, allowed the through going backfilled and the we'll some the you

Scott Group

noisy just little was for of fourth year. It OR year-over-year then do us about could seasonality quarter? this OR thing, a Anything last And quarter. fourth helpful. quarter sort think sequentially last noisy just help you Okay, to

Adam Satterfield

Sure.

the maybe do the base seasonality would put if and going have noise in quarter a got XXXX normal loss as over year point it. have a little I back, right that maybe little call quarter in you bit XXX average point us this third and for a benefits from ratio basis would out quarter quite that down, rounding, side, of skewed was with points. bit was Normally the averages and a that half basis from sort you increase second it for that average use Last kind a to a take our XQ. noise, half up on fourth been, XX.X XXX it's but so about just of think if the think I you then going into sequential just if will five-year sort that if you quarter maybe of line of operating of But kind a of points. obviously,

see line. kind of to adjusted that watch given expense guidance you that's as And roll the number contrast Phantom and kind baseline not always, go, is speak, of stock but if sequentially a that would averages. obviously, the by number It's of likely But and we'll for increasing that quarter, to more continue for quarter to kind around. be Obviously, XX these to to So comparing the an that would for swinging baseline my see ends become -- in so things giving stock probably third it that in price we're but creating of would would sort how to. be higher be going will which what we it within be comparison longer-term is us might be bucks compare good up when that our against. than average,

Scott Group

Thank Okay. you, Adam.

Operator

our Go with to next question from Mehrotra Amit Deutsche Bank.

Amit Mehrotra

Thanks. Good morning everybody.

landscape LTL market utilized. because, evolving efficient success Saia for I to or some of kind be a questioning, share investing is early expanding obviously there. guess network more is also Just I seems time the to line competitive its the seeing the in to better follow-up on first of while. wanted XPO and make

anything doing kind to or an engaging to of going you're different think like differently of you're landscape. So with there Southeast. share, market competitive some ceding is if market the backdrop? in evolving doing context you or in particularly in sure It the that about how anything I'm trying seems that if just understand you're I'm just not customers

Adam Satterfield

we their needs. continue But can at we the what their to demands respond the we MASTIO how evaluate to means us day, data see detailed the changing and get best is we think to with the of look service. customer to to that our are data continue of for I sort end customers that engage and results. on that we have perceptions do this very from and these And

as we last As are has really number one to best those improved to year of XX that were compared perception in for we see us. attributes, Greg XX for mentioned, and pleased ever the the us showing

service the in might at a And can So we're focus right price when you doing by to next the little on still that invoice I Old bit our higher right as Dominion. get look of our regard that using continue continuing lower our a equation, for for the perceive service love total we things, but certainly transportation value strong the value. cost be us and that than maybe feedback very as person, be think customers, to they

So improve customers. money service save to delivering a customers we standpoint, from also can picture big their they're help but that our the

Amit Mehrotra

changed has the come all or kind the to sense between, versus spread guys a our versus you that you of where it own is to rest increased? Adam, for far Has how spread relative get edification, just in? ahead pack the of are at the has of now pack, are that just I'm history? trying between the

Adam Satterfield

year. this widened It

Our widened then we most share, the of region, with market Midwest, our other at kind given tremendous big our where the we've what of when share cycles, the growth But of back market environment we've flattish when in the we've and market comes is, look the to back in terms line gone we're prior and kind both growth, and just slower of seen. share market some just Northeast that's by seen regions. of lead the more through in in picture tonnage and

we importantly yield like mentioned protecting protecting but we've think you things center service prior our in we slightly, hold our doing continuing capacity. most we're certainly terms like our and as own and in Southeast, in is feel service cycles, The and of short-lived continuing invest economic to that's right down fairly seen the and that just to

Amit Mehrotra

XX% quarter. disclose more productive I labor disclose were go just how very was third the of And Can quarter, know it can the just you it environment? a in sure the That's like the where context It Thank Like maybe that quick talk, in labor What's this nice a follow-up, wasn't but was of labor first Q, of you. the as in I helpful. seen in reduction if front, Okay. bit revenue we've quarter. little difficult you can opportunity productive your costs last just in there? low the you XX.X% on kind costs. a

Adam Satterfield

third the we improvement slight where year. it quarter know. in It XX.X%, third in don't labor was How we productive last the of low goes, so cost quarter, the over a were

leverage industry. we operate, at our technology. I We versus demonstrates over we're efficient the we that continue how look the particular invested and this technology we've say that in think can of how the element would already, probably years I to continue to cost,

that's it's So implement continue that from or standpoint within or gain look we line-haul can of our type can at make we'll to whether tools efficiency we how something and dock that operations. delivery pickup planning a any

help can to efficiencies to day yield as operations, services of well, back can. that this We're where throughout our do of the drive provide can functions to we all then But that at want we technology customers information thinking we're ways our to and areas about better every looking certainly on all and use efficiency and there better office continue we things that that side. drive

Amit Mehrotra

Right.

on Okay, good a tough, Bye. lot. environment. in good. Congrats a the results tough Thanks

Operator

question Jason and next with Company. Seidl our to Cowen Go from

Jason Seidl

some a your of Thank you, end operator. to bit markets. morning, Good want gentlemen. I about little talk

is parts by seen, would strike anyway? negatively you business what GM you've that business was the in impacted Even declines look consumer? with with the quarter the lot to that of a industrial GM, we have there others. though as do not of terms any difference In And extent, at you some versus might between

Adam Satterfield

the in but question, economics maybe down from indirectly GM be feel kind particular no, on any see other a nothing or of the a may that we direct regard, region fact The be that standpoint. of didn't impact any might little than bit, that

our XX% XX% our to industrial, In business, XX% and terms is of retail. is the to balance revenue close of of

definitely this an been slowing impact that had on so related that's And we industrial think, industrial had our economy has I as felt, year, customers. have

at business for us, change side, industrial you for negative There’s if revenue, and growing the in multiple point the in more both on the been kind its that then fastest probably that. of retail will, had the the this with retailers. is line And and reasons since

industrial price back. talked year. conscious, of winning of I that first so more been is the maybe where brought are is in about, with have back have and business line the down about half of think talked we Some that a rate bit that more before they that may growth we or little in But the that some

longer than industrial. retail probably see grow business faster So, we’d to our continuing the to expect term

Jason Seidl

opened to listen, the second frame a saying, for equipment don't have my we one-off and know facilities because very you question, good a up, up, which take investing Adam. to here trying call also hey, give great just that's trying of I XXXX, technology. the right guidance Okay, spending, phenomenal capital about you you and and in want I back record, you frame look jump but color, long-term our mentioned to approach to for I'm at track just guys our spending. it

think, any how just just So, about CapEx I think giving thinking? without we should just XXXX, XXXX trying directionally versus was directional to numbers,

Adam Satterfield

but I for since going the Well, numbers, you give ask them… was didn't to you

Jason Seidl

that you Oh, email too. perfect. always hey, listen, No, can

Adam Satterfield

We're of to into trying bottoms-up primarily top-down, go side. will what and of environment process, out might get figure building equipment finalize for we trying up the think planning, a be from before a through detailed XXXX. top-line forecast a our CapEx the process in plan on to We and the what actually, we like standpoint a look

But And that add things target list, or real we to projects going, long-term out so, eyes could from a even we’d be always our the centers higher that plan have estate keep that and a our we keep expect standpoint, a need may centers. certainly XX on too two-year got we've to about service next continue always front, in that longer so works, which we think our places be year. or the term we we service on of

would present If on, of, but that they available, of we kind the perhaps any service becoming ahead advantage weakness three-year in our themselves. and opportunities take be might the plan, results some go market in centers

eye will We our there. keep out

just I next equipment And mentioned that what take to then year. replacements when you look then the on are. fiscal fleet side, as probably, generally the at happens, And in less, little the we and the side on heavy have we're before,

we'll on well. but higher XXXX, on our maybe So spend equipment little in a expenditures standpoint keep as overall, IT obviously then an from going bit we'll my is lower have probably guess that the real and estate,

Jason Seidl

Perfect, that's always. Listen, time as appreciate color. the I great

Greg Gantt

the the be have real in will that are started from already projects planning estate majority CapEx Jason, we in side our keep mind that we to spend that complete. of

Jason Seidl

Understood. Right.

Operator

David Stifel. Ross from with Question

David Ross

gentlemen. morning, good Yes,

wanted Given changes know see or of the to your significant quarter, how, terms there’s into different in your any other XPL any market? this exposure guess, from XPL Are you the XPLs significant October, to world, there customers? trends if pricing the different I XPL in and volume. I And

Greg Gantt

our like, trended. anything, have customers if XPL It seems

business about We've but point, on trending if past, in side. with this talked that We are significant positive doing XPLs. the they are at anything, the

David Ross

would they growing faster So than be of basket the other customers?

Greg Gantt

correct. is That

David Ross

very you Thank much. Excellent.

Operator

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

Todd Fowler

obviously you in think if the contract Hi, maybe for and could some basis contract moderation morning. trending that is but share know industry, renewals things been that's been you that a you yield and year? of are comments I pricing? mix rate some good great. impact Thanks on base, Are the maybe reported pretty see of, some increase how on Has the where consistent? we just I and could was that. there numbers, any wondering kind this seeing the

Adam Satterfield

companies kind of Sure, yield any because and stopped the reconcile one, it actual Todd. on what to renewals, are. we say, like, don't what we giving details numbers numbers they other especially felt somewhat Well, contract kind hear of always

been we've per of in down with get same it little of see you effect, boost, don't type so will, mix It still bit, this third a the kind if can in you able weight you more where the given the was shipment. year more but what a to on But a little have of bit line. contract the quarter renewals,

the more long-term. heart that do the we're to of trying what revenue really trending, at in and shipment, per look how we if of that's our will, When you kind gets at

Our kind to been to XX on X.X% per of XXX and been X% growth than per-shipment has cost been shipment of a what range in higher basis our points that's the has revenue kind inflation basis.

in probably the weakness. I'd headway, we XXXX, which getting in the didn't shipment kind year was we same have above last probably XXXX but regard. that little This that of not of say in made year inflation, bit expectations, delta obviously a cost type more and that full

cost well. a shipment little Our been has higher bit than what had per anticipated as I

balancing our X.X% and came it about our a per be GRI regard. act, on into the a is in our to that year trending when always comes our but It's increase what will renewals shipment contract -- assumptions we cost target, expecting and

renewals that target. positive cost say increase inflation been that certainly of And so, we on our target an have above and that, I'd the side

Todd Fowler

Okay.

kind it's not right hear kind pretty maybe your not slightly I of the you below now? if I range Adam, So, and about unfair of or renewals contract think and consistent targeted correctly, unusual within mean mid-single-digits remain to

Adam Satterfield

all the say Yeah, long, really. that's been fair they've got to pretty been renewals and that -- have consistent we've year

Todd Fowler

in an about decline trend, the third then gap September caller's quarter in the per okay. it to think like gave the question And numbers in follow-up, closed. feels moderated Great, that earlier just year-over-year the shipment really to the you I weight and

do and that you read how per results look turns from you can that that that stabilizes the about weight going impact what does perspective? if forward, what a at shipment, mean When that you positive, into metric? As or think margin

Adam Satterfield

of those certainly and to and going the per your pickups cost is same. weight make produced dock going same to has to lower That be same you terms to shipment is in stops income are well, a so as lower per The of the deliveries, the continuing handle be shipment revenue and handling into cost number operating the eats basis. same the per-shipment on essentially

little fairly down quarter. weaker. that pound-ish were we XXXX as trend we levels, X,XXX But the per we've it's was slightly a with well, consistent range; economy the industrial of in But XXXX really been that and in saw that when what that late bit was sort below weight shipment in the seen, through during

reflect been were to economy, economy reflects per little and little a or came it think that that and to show the I about the the had to pounds in of August, back retail thought that of seen weight business, So, that felt like mix was softer has higher going pounds. continuing but the kind to X,XXX to in shipment pretty the economy pleased maybe in industrial a we weakness and that September see But bit had I in to back it solid in X,XXX dropped timeframe. we the bit a drop fact to

to was number sort there regard. in really I back and pleased that that up see September help So, us of come

Todd Fowler

job time the in and for nice Thanks reference getting earlier. that Okay. Transformers

Adam Satterfield

Todd. you it. glad Thanks got I'm

Operator

question from is Our Research. next Matt with Brooklier Buckingham

Matt Brooklier

thanks that increase quick. place third quarter? was did you and morning. magnitude Adam be wage put good talk the Hey, of into I'll to in

Adam Satterfield

was about this extra don't I but continue to in other cost do it, we that on X% as side year things benefit I add said the it the well. think some wage of terms and

it's as different we with continue to both the emphasis time that offer, have, there's changes some program the generations the between incremental think of a paid those kind off made a whole So, on and achieved more to of got things value, we the other at healthy look and this we balance one to benefits. employees wage. of benefits you've and that your put I we have may And the But between year whereas that both. wages we some

Matt Brooklier

what that was last -- X% compares it year? to And Okay.

Adam Satterfield

About X.X% last year.

Matt Brooklier

can center then for service locations your year. to of the And count, you more expectations the through opening talk your end Got it.

check think last message wanted this I to in that's the looking still accelerate the to see just plan were if you rate quarter of year. was, the here? to openings terminal I

Greg Gantt

Matt. Yes

have next of those have we so the will look today, first -- and that several are a we year end in dozen that or now. of quarter opened then prior process have XXX we half the opening We and get at more Several year. we will to

Matt Brooklier

facility. facility maintenance quickly, on multiple then do needed to just either thing color network where the in your location? certain more new you're you of, this different a of loss the maintenance one little property or is disposal just a give something incurring bit Are that at terms you Or Thank to kind that And is make a doing maintenance expecting for just Okay. a to respect capacity some a one-time expanding more of location, us a you just way of Maybe to in house? one talked you maintenance? last you. is more Are with locations? in the

Greg Gantt

that's location acquired on out occurrence, property property in one other so way additional standpoint, We a actually bit one-time built from It Matt. from us took was that new acquired, the we a operating an in and and space did that quite it. why standpoint, facility that we maintenance and was we a a the absolutely a restricted some yard

Operator

with next Lynch. Our question America from Ariel Merrill Rosa Bank of

Ariel Rosa

Hey, guys. good morning,

somewhere kind to on might when thoughts improvement? might of improve career? your second are XXXX. just they love I on start in around see seen that we first to thoughts your I question, touch downturns think this A get your your severity of are how wanted on my you've that where to For the some half conditions just on current what compares to would the number start previous downturn of thoughts to carriers and we in cycle, mentioned

Greg Gantt

I'm get try I will one our half to and trends be. That's and demand lot on TV, those we hard have play second might a but of out conversations comps call, an easier next economist continue economic customers certainly, to to reports to don't because the in look at with And what not for figure us year.

as cycle, landscape got that's probably, might But the through election part bit, risk I we of you've the our and this think and overhang had. what that work of into a effect an going little first standpoint still what year, way political a from be

be to and continue drives XX% the consumers the of strong, economy. the consumer Fortunately,

of in from they'll regulatory So off seen. maybe rate a spending we had what of can we lid have can the get maybe and if then the take more and at a business standpoint, confidence tax be a economy might healthier terms landscape like the a little little growing bit owners

our challenge come than we trends And to can might more I rapid think the will we've it if certainly the in be volumes past to certainly like reports proven of We happens. what recently. certainly second stronger certainly ready But pace position we'd demand change to that we've rise as half and much. think have and that incremental year, that if seeing and been in the a way the be suggest at read in

Ariel Rosa

you you Great, that about earlier, compares retail maybe your holiday mentioned in exposure. talk retail the years? Adam, helpful. season, Could a that's for bit levels And, to preparation previous activity you're how seeing and what

Adam Satterfield

whole We holidays. minimal, don't at see a It's from impact of anymore lot the best.

they're retailers they way. to just I see think most used now a of compared it and huge don't We the far from in of either that what impact to out so whatnot; front be.

Ariel Rosa

then Fair just enough. And question. last Okay. my

most was your recent So X%. was GRI to close May, it in I and I think think

guys it that's kind to Just they are, moderate next achievable level have market are bit stay for assuming share maintain to you an you where that do activity think the levels a do targeting? think year? of you would that Or,

Greg Gantt

as closer point we and that in think make whatnot, get I market early evaluate certainly where too the we with will to but bit time, are little those probably we a to decisions.

Ariel Rosa

Okay. Fair the enough. Thanks for time.

Operator

with Question from Chris Wetherbee Citi.

Chris Wetherbee

implies me Yes. in I comments, Hey, come yields wanted revenue you easier the here and might tonnage XQ, think least, bit you I tonnage in where backwards thanks from in per about step October, and for to I comps. assumption guess a to against I a it at back little be, guess guess, if an at make the day down end. squeezing the implies,

think seeing market, And early the what sort lower of a what a question it's I XQ what be seeing seeing third of get down end first XQ? as total here was much could the dynamics you I maybe than than do your the where little tonnage, based is, admittedly in the weaker in the you're wanted just know maybe guess market. you be sense in from may in seasonal, but customers on the are that that to or maybe decline you're quarter?

Adam Satterfield

current kind the have get we'd if anything, months were the point, things first trends are going three three certainly Without they we'll little sort XXXX to guidance mentioned of how last normal what us, into kind growing if we'll comps so and see obviously, at we specific fourth when can see this and of seasonal easier our trend include for the the of that sort back love so and of a kind following in nicely giving October, fact come in improvement, patterns some together you bit just if hold, But, continue of things now to any for the the piece quite on quarter in. months us. time,

sort at we'll is per-day So you that think day in of X%, quarter. I in but a that to slightly October kind this point that, the than revenue on overall, it a mentioned, look basis like marked and improvement, we had but when decrease X.X% it's per continue monitor X.X% I the just down the to better not that third of

continue to with to to from continue us And monitor and we'll those nice trends, if customer see some these to to hopefully see we'll can it'd back business So be continue a coming standpoint. dealing trends the we us declines versus XXXX hold with more this maybe back into line in that eventually might somewhat year. that get faced a normal in seasonality of allow environment, growth to

Chris Wetherbee

to aspirations? share. in sort what capacity a of want to opportunity about opportunities case entering helpful sort terms that or and about we're understand. No, of of XXXX of to sluggish think then little grow just a along? sense a you're from want do a the in of be we bit us take in maybe talked Okay. give maybe just on are environment about about you kind when you that's to as that It sounds demand start I opportunistic just to you of or bigger sense you XXXX? of Do and but you've a think obviously separately, sort kind assets approach that approaching XXXX, you can of you good respect, you've come continue pause think available, continue And how your how before growth Just get current perspective, like picture talked in, I

Adam Satterfield

be look always real three process needs. the able limited. amount certain doors LTL capacity, can network otherwise to buckets requires of biggest at We the be the estate An of freight, a to being sort big growth and of component

a stay of investment that's and and plan be something overnight, ahead in long that it's the can't that ensure made to to growth time takes that we it an So front. curve

for network, capacity, to So service couple we've excess over the capacity around I investments made years, of center to number an probably so ate think XXXX be plan to closer The we next XXXX capacity had that like that toward when the somewhat, that progress growth have standpoint of little we're big maybe in the getting kind we've and kind and that that somewhere and still the of we're of growth excess do last up spare XX% in our we're comes from bit trying leg place make that we'd higher, way. a it within XX%. into so

people, standpoint, that made And we've some demand to the we drivers looking of then, dock. always from had a had have people I at when we're haven't pools of this and our drivers, to moved think some changes train dictate, the that we've the to our year continuing

something more might for equipment get up in for on is would for, the basis. again, picks bottoms-up of and on equipment then manage is will that in we that we the and will demand they and next be tune piece what be that still side, that's final really fill needs we so we full-time to finalize the fine year-to-year for feel when When are think projections on need be when the And certainly and what XXXX. the our type a And be need. ready year there, place better

Chris Wetherbee

Okay.

that's it you the super you're very where mentioned what stock a as I stock? of about helpful. to be can fringe would specifically? with detail, question That's Okay. saying the the sure of as good because you it things fourth sort for Phantom XX% make but give guess quarter, equal, had just higher Last all as quick is, on want XQ,

Adam Satterfield

stock Program we baseline, is of year. right. the in of quarter Phantom Yeah, of about you quarter closer line items. benefits in little second Which, expense, this probably this and perhaps lot million comp of XX% Share exactly that's so kind will, and a included year takes had second and to with a been bit variability nevertheless, of that's number if kind $X this that that the in good what before. and That are of But puts than there and workers' just Phantom a seen off other we've the more fringe paid time there's year fluctuation on

Chris Wetherbee

Okay. Perfect. Appreciate for Thanks so much time. the it.

Operator

Sterling take next Seaport with Securities. We'll question Global from our Kevin

Kevin Sterling

me in. thanks for Good morning, gentlemen Thank squeezing you. and

back more it make question, see a is rodeo, you because Have this over about time? and bit another forward? talked about little to back it be customer of your coming poor sticky maybe going because seen this Does perspective, you picture this The more of tend that tend does real you and price. from were well, mistake realizing, that again. but service How have to big little Just getting a to they bit going of carrier, business I'm a business to that should be not business not when a a service, first kind may you we historical business comes they coming to sticky. think you, lower leave left From because to with back you?

Greg Gantt

doubt, hope We for we don't once maybe think No got that and they sure. want to customers burnt would have burnt so, I certainly get twice.

yes, we So have that. seen

the may But at yes, next who for does They some know, more for management become it face in what knows You the not, most situations new customers get sure. what change. cases you various the year. sticky will or part, and

Kevin Sterling

little know this moved you. a around And bit Adam, rate I you. Got Thank tax your quarter.

quarter. to fourth guiding XX.X% for the you're think I

assumption? for XXXX, fair range a XXXX? Is a think should that for rate in we that tax XX% For about

Adam Satterfield

I good to that's use, yes. a benchmark think probably

Kevin Sterling

today. so much Thanks time had all your that's Well, I Okay. today. and for color

Adam Satterfield

Thanks.

Operator

Our Baird. last Hartford from with Ben question

Ben Hartford

you Adam, within squeezing and the weak low been here, this me the on loose, there at any has X,XXX in has quarter. or took Or, low, shipment. a At here? protect efforts in as confidence but network. kind trough? network pounds to for was that it in. last we're weight per perspective, could end thought as mix industrial drag XQ really, it Thanks in just as know I as earlier year of was finalize It Hi. decade, market running that it are what's to the truckload is thoughts X,XXX XXXX. What the there? We change capacity sort from know of your your been level lower trends from near an level that been a of number have is that a

Adam Satterfield

a X,XXX. that the of I bit dip September, slightly we're you that sort shipments rebound things had kind we sort will, range that, it I jump to just and But me have if that now. more right August, bit up widgets coming like the in to think that fact I back exposure and kind little of for positive of of lower those that above this just a and in be sequentially, there's bit see back Probably had down little think back change, in weighted. we demand fewer in But and little before, a retail was of for good really to mentioned lighter we a mix tend

well. reflection widgets I to of And and that's the XXXX late handling period just that similar and so that on fewer we're a environment, kind shipment think very as of each XXXX

have headwind, per for the year-over-year earlier type of change will, in you X%-ish decrease in the shipment. we we did the cause that year, if and the was operational weight So

standpoint, should that numbers, more in of we more -- And you if mix in and will, line comparable so now a from be type with regard.

bit a -- sign the of just of I continuing sign in think slight somewhat was be a little operating decrease a weaker just it's environment. to

Ben Hartford

And the as the residential-type vein, for have potential residential services deliveries network? some in relates in delivery. threshold your announced I recently, across threshold or that your it viewpoint guess the change to within competitors Any across

Adam Satterfield

our We something trying we'll of get on types residential focus not That's at The needs. and we're there, our like to on more point. focused this better are there from Not continue of needs LTL feel into necessarily that and deliveries. market regard. to the customers opportunities out serving not

Ben Hartford

Thank you.

Operator

back to time, At or call any turn this will I the Congdon Mr. remarks. for closing additional

Earl Congdon

But the am share you the Dominion I year. as I to this award, well like accomplishments our Old this proud recent close appreciation as would Thank extremely your Earl of family. before we with Okay, also my today. all is participation our call, Congdon. financial for MASTIO entire

accomplishment. reduction ratio I of quite think XX, operating an a our in keeping was in that below spite revenue,

we One of place your good happen. give know we that team Congdon shareholders, have our largest have if that day. continue, make that questions a to Thanks, wants profitable company's We the growth today will and appreciate further. us free anything in call feel the a to see to family certainly have the you and and

Operator

participation, Thank now you may you disconnect. for your