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ODFL Old Dominion Freight Line

Participants
Greg Gantt President and CEO
Adam Satterfield CFO
Jack Atkins Stephens
Todd Fowler KeyBanc Capital Markets
Chris Wetherbee Citi
Allison Landry Credit Suisse
Jason Seidl Cowen
Scott Group Wolfe Research
David Ross Stifel
Ari Rosa Bank of America
Amit Mehrotra Deutsche Bank
Jordan Alliger Goldman
Call transcript
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Operator

Good morning. And welcome to the Second 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 August 7th, 2020 by dialing 719-457-0820. The replay passcode is 1718368. The replay of the webcast may also be accessed for 30 days at the company's website. expected contain Litigation within including Reform others, Old may the meaning statements, call performance. regarding Securities operating Private Act Dominion's conference forward-looking the statements of among This and financial of XXXX,

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

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

to As ask we a yourself a Chief like Please cooperation. Thank final remarks, note, at company's questions. couple would you returning the queue. of fairness a time to all in But limit just to conference questions today, that your sir. welcome to ahead, before the to go Executive and time before over we begin for turn your this President Officer, I Mr. the Gantt. opening you At for we Greg

Greg Gantt

despite call. challenges the delivered your operating welcome with With economy. take operating will Good today financial on OD glad we second some Adam conference second for The the team me CFO. faced be morning and questions. After Satterfield, remarks, quarter results and brief the to quarter our we the is call solid our to

variable XX.X%. to accomplished our declined revenue were our Although, and of spending. by to ratio our controlling we a yield, discretionary this focusing quarterly managing record cost, improving our improve our on We pleased operating XX.X%,

capacity over inflation. approach consistent the also our know our and long quality expect appreciate profitability each has our account-by-account service this approach, Is process, for yield to ongoing we manage long-term fair of an term. strengthened cost from on this relationships. offset customers which in year. is process our this and price the to of investments while and proposition, believe management We of at consistency Through profitability they supportive revenue customer what Providing the customers. Our is We us as fair technology is a our value helping critical superior believe basis.

in levels customers is team the regardless our Our relentless of environment. best its of to commitment the service to economic very providing

with contended claims While are our and common leads primarily in widened generally new second the components our we also has failures, become the per improving many that we of we narrow This a so day, X.X% quarterly is which It cost believe XX.X% our on current the And service. revenue customer feedback, leading industry on operating challenges based are environment. in shipments historically in recessionary gap we quarter, committed ratio of while our produced in productivity. focus service standards the There to focus the us practice environment. to including many quality. decrease service customer competition company between a in why support industry is a

and have to our because high a We in the dependable especially industry seems quality service recently importance and many increased our for customers. believed of advantage us now have long this creates that it's for of competitive critical

opportunities. encouraging of only few in that has their disciplined it customers have is believe months remaining the but As leads This been are awarded many that for rates rather from past with also to overall pricing, evidenced historically this value. business future lower to competitors not market share relatively new provided trend, than we our us trend

an wages of quality and our revenue salaries, per our our based our cost employees expense. benefits to basis represent the inflation on productivity cost import. as is largest on of operating as a process critical our shipment Minimizing appropriately ratio, is our ongoing is just managing largely While the

workforce an believing to improved available could of that in As an in cost percent our employee our was balance decrease enforcement with implemented program work, recover initially we are XX.X% second the quickly, result revenue year-over-year resulted direct that operating our productivity, the employees in in in a employee efficiencies able our improve adjustment April. XXXX revenue economy reduction count furlough to quarter. sudden and the of a that to a The we full-time of reality during as occurred significant April

also is economy We reduced and Many that overhead to controlling our continue. costs. return this increased optimistic accelerating we still are May the of sequentially have able June, a can improvement. took cautiously furloughed volumes our in spending expenses, employees to been this operating while recovering, trend as to While discretionary other result reduce to measures of work and various

circumstances created diminish addition, In certain entertainment. to and as reduction group savings future such that in expected the are dental with environment cost a health travel claims associated periods, customer COVID-XX in and

to of of difficult our have operations periods respond this quarter quickly experienced one environment. the Second I am And proud our career. in most of was team's in and especially I my XXXX ability manage

good shows in times both I quality bad. that our business think our results model the works and of

will and economy While our are industry for needs the for better capacity center to any With in to investments of continue than our unmatched of opportunities our service carrier certain other LTL in respond increased that we services. customer the a create to OD family we long-term the changes LTL recovers, long-term confident believe there will that position service, industry-leading dedication chains industry. the until employees, in I'm likely should challenges supply be

financial a quarter results our confident morning long our detail. you term, in joining growth As for shareholder continue increasing greater result, while value. and also our will producing us I in ability are am Adam profitable to Thank now this discuss

Adam Satterfield

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

share Our $X.XX for XX of basis which the improved contributed per ratio earnings to to quarter. diluted operating XX.X%, points our

second the LTL linear had shipment. weight in in shipment. revenue impact in decrease for yield, our being our our hundredweight of a fuel LTL in quarter per increase surcharges, respect Decrease in on impact average fuel hundredweight. surcharges, revenue changes to significant as which the the results revenue a due per LTL fuel per XX.X% primarily a notably X.X% price reflect topline reduced decreased decrease tons not as the length hundredweight well mix. of revenue are and per factors an Our diesel our have X.X% can significant hundredweight, Changes weight to revenue excluding revenue per most on per average in and haul Multiple with also

per the hundredweight did evaluate, measure revenue of second result, to a so the is tough mix during when our quarter. business a As like it significantly changes

fuel a we the in remained revenue but per shipment the improved revenue then on shipment. might suggest otherwise, relatively in positive increases revenue per was the to maintaining day better in revenue quarter. as XX.X% change XX.X% revenue believe focus was down the June, pricing for quarter, internally XXXX. of we increase basis compared our sequentially first as measurement, quarter, consistent. excluding the per in trends. was We and change trend revenue as rate example, per long-term the shipment hundredweight a the a is per and during in revenue While quarter X.X% per as second Average spread continue on remaining surcharges, to with second April, well The second underlying cost day between negotiate trends to in quarter during XXXX, months With for our the year-over-year consistent of down our June relatively believe respect

acceleration May per in and X% in LTL revenue per as June. shipments is current The also down a compared a trending Shipments day day minus. decreased sequential followed revenue only sequential increased pattern. X.X% increased X.X% has continued March per basis, from from in With day change to shipments April XX.X% similar month, July. days Our to remaining plus couple volumes April then into our XXXX. to of On approximately the a in May or and

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

a improved two-thirds or with significant semi-variable of matching decline to also these spending. and than revenue. was in variable are effective XX discretionary team our our costs us costs the operating while More for our despite revenue, basis in points the Our XX.X%, in which ratio change record was controlling

Our operations did the team also efficiencies job quarter. improving with during an outstanding

we environments We return improved believe we of during once productivity have much growth experience, environment. maintain, can this we a from to and productivity historically recessionary

capital respectively, for percent a million million and of increase quarter flow revenue. to than loss the in our second the percent million of effect from the and in improvement the for million cost, our while a the $XXX.X We $XXX.X more totaled capital for our on million expenditures deleveraging had $XXX.X XXXX a cost half the first were million first months quarter and Dominion's the of $XX.X $XXX.X offset Old as cost shareholders year. operations direct and overhead fixed as second same six returned periods. the revenue certainly of While cash $XXX.X revenue of during of

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

quarter to currently XXXX. the Our tax XX.X% XX.X% morning. expect floor this second be quarter effective this questions the to XXXX for second time. for in the rate for concludes This as effective We our be the remarks compared open XXXX. XX.X% to quarter rate happy third Operator, was tax of we'll at prepared our

Operator

take Stephens. Jack We'll our Instructions] first with Atkins from [Operator question

Jack Atkins

seeing your So, I said moment, Adam, to with remains to your been pricing regard the commentary the with environment think second you've if consistent in over quarter. going the past the I you a comments prepared environment relatively pricing what maybe quarters back on that start could several for because

in of have pricing, here couple you if weeks, curious of your noticed conference around could that the over of a last bit just on We an with several in have maybe talk tone acceleration some in the been you past about discussions third customers months? anecdotes and couple pricing little quarter I'm over maybe days a heard shift maybe in public the calls - there's

Adam Satterfield

consistency that what Certainly, always one our focus we appreciate. don't is operating at that our inflation shift that's tone know any of think the with I our we've as expect try us an They a in in recently. and account-by-account year I to respect well. customers basis cost heard and that, to to disciplined ratio approach we're our every what pricing, on know on customer to and out accounts point pretty the target what is that

increases are long. part early the impacted I of on So, for some getting us, have with we encouraging the starting our see earlier, volumes all in we and some April. quarter, cases, just this mean, trend, mentioned some approach lost coming our But may and to in as we've some may well. consistent continue that's have year been of in that us, to we that an volumes been like we back back of business

that when switched to. they to were and carrier us of the getting think coming from service that the the didn't like might the they Some have they look value received they business equation, just based there feel total us. to on came back that back about other And they and they value

we'll that's So consistent what on that's that's continue. to to our type to approach is what inflation of long-term focus we workforce offset intend continue and cost just

Jack Atkins

for from in that are may business in, guess are your maybe be now call I some per sequentially, guess the trending is revenue - July temporary there thinking but indicate layered XQ, kind about And some better just seasonality around but XQ there to question, that day ratio, is the getting here. commentary then back costs revenue stabilizing. deterioration, modest I normal operating would trends of my follow-up would

move us Adam, progression to third and how kind or quarter? you the that and can take those we relates maybe So into help takes of to puts me as

Adam Satterfield

then Yes, second a second we a revenue the over the basis point quarter and the is but is quarter the third, are typically and seen quarter XX% to quarter. it's would deterioration normal typically from we about first of second slightly about increase have third in in, XX environment, the from clearly which

historically second your quarter on operating a get, speaking, you in So most ratio improvement sequential of basis, there that the is.

second can keep the And trend, so, overhead in and lost quarter. some within points basis on then particularly that overhead the that quite lost we first of category the environment, if there we the revenue depreciation, we in from few accelerating this a leverage and this

along But some So, revenue we try continue, with quarter, meet that. and in other that if exceed where the simply, trend be the were should we what costs this able expect that unwind of costs we particular unwinds, else, productivity some definitely is and should third should be deterioration that maintain coming or fully we can depreciation. than we then that the continue just in if should the those to to that have back depreciation can the certainly And online be all long will certainly quarter. in factors, first that to we will be there revenue think there we certainly the beat term that leverage on nothing given improvement

Operator

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

Todd Fowler

want. easier. in and you in your Greg improving tonnage bit maybe that, in about you I talked remarks, would quarter, environment more freight when that the that maybe the a and pick challenging a bit this think revenue of stronger a that of It's little and can here choose you prepared in a quality tonnage where could kind environment little negative

expand And standpoint, So from can quality you're able and a do that what what now? on on revenue of essentially to you focused comment? you're right

Greg Gantt

this some some they are because that cases, revenue did our we us. business and And others the definitely service that Sure, meet we had that of through. gaining see was earlier, of Adam that that just the some some doubt for We some lose of lost that challenge - and freight to put and standards a - customers from likely No they back rebid but of Todd. mentioned, did in in we fortunately, And us. process, we thing. other environment deteriorating with couldn't gained we out bids kind that more came in

always service value fortunately, outshines it's that's your some. is a win But our competitors. some of you you outshines, challenge, end your So And there the day, business. the lose hope ever at the that you

So far so good.

That's We've additional regaining are of new We good taken thing. on that late. we some of some the a business business lost.

so did think month open there the it's us third that definitely into for July, of been quarter the up far have roll went the So and I quarter, we some all opportunities as as strong. looking in

Todd Fowler

to said some price so Greg So, and is network what this business - the it didn't in of of yeah so comment that quarter, see away, to well come a earlier more was in maybe - fit but the go lost and some now? you as sensitive the or you starting in business that that see okay some profitable, you're that it's back

Greg Gantt

price. at our Right. Yes. Coming back

Todd Fowler

Got you, okay, that makes sense.

Greg Gantt

that price. lost our got to the Coming lower mean a back it came doesn't and at but the greater value customer a we We of price, it obviously value provide. back because

Todd Fowler

Understood.

my any level can follow-up; Thanks. something of shift you think at that see per then in increase weight business the for And a or X% the you you're and right have activity? of that as that Okay. Adam, up that is do anything Do or the now, color shipment, sustainable? the you're kind is economic that on the in indication just you share in underlying handling you is that improvement

Adam Satterfield

most sort some of of the seen at And X,XXX X,XXX that of June. over of is right in stay shipment things business trend of increased had pounds weight remained that and term back been when shipment We working early more It in since that February, a its about pounds. back we peak changing reached account that April we've at national pounds home started X,XXX stages January of then in per more March, it a the the way it open. an - certainly was per was of pounds swing X,XXX our to and weight right had orders. average The longer started in above in a wild the

smaller business of mom-and-pop Our type has per shipment typically higher weight than accounts. national our a account

we're say on of now starting the continues are And and think so, this They of accounts performing that shipment those strong. those of getting, their to retailers companies some have and I online. bigger weight continue bigger per that a in to the lot it's accounts. demand, heavier. smaller come national much well be increased business are But back retail those some still just our And side, when would more some of about from you be to environment

So we pound we're it's range. smaller different back accounts to pound little back to continued it But of July see of kind expect the is the into down And mix. bit X,XXX lower, a this a that It online. is bit come happy coming could little more the but X,XXX that drift range point. at

that'd the around we're seeing. for be sort being, good per And that so, can stay shipment see and a time trends overall we to level contributor if that that the too revenue of

Operator

from Citi. next will with Our question Wetherbee come Chris

Chris Wetherbee

could little back are how bit. specific commentary rough get bit was you hit like us pricing in could actually on there kind seen, don't you've it's you I just know a with as much of sort maybe color sense. on but give activity incremental XQ, sort I reset, is Can you kind little contracts sounds us curious a being you if happening a but more Adam, add? where of been through can what quarter? It Maybe, consistent give the of

Adam Satterfield

kind about the We stopped our - average talking contract of renewals.

might And in contracts weight never commentary changes average hear reconcile factoring kind of same report general revenue even give of per and some in to it per what that, seen the we the increases of some increases, as shipment in fully or others the their be others hundredweight.

at just is to what I that's typically somewhat line would been that how alignment to falls that's revenue and that, shipment increase And X% between we've with per X% in on achieve trended, that's been more And as with able average. looking of and say so well. that's kind in

that increase we that have And that this that's for generally X.X%. went into as well. our was rate year, general target contracts at a We have the earlier effect

continue been. we is target. what this long-term trend ballpark And our it's has really able been So, in to achieve It's what we've to what year. that

been thing. cost contributor is there that per managing shipment program, the positive it's has our really our two factors good a been Obviously, to a delta that where So and ratio a success key shipment operating cost managing per our those revenue our of long-term long-term between improvement.

Chris Wetherbee

when LTL then of cycle, want of of sort potentially in opportunities seen these think there truckload network you you we've spillover the to into in been just your the about And a when sort volume tightening manage has context market. how and past, the maybe

you're disciplined about want always guys maybe really business want market all early your how those as as to forward. what what been know You that But see around talk But kind potentially of in that maybe you move of it handling expectations do tight who kinds not take I have that or on you truckload kind if what of opportunity to you things bit kind about network. of thinking in of any don't of are indications it's about too curious a move just the in. is

going So larger maybe be TL of LTL, it type kind would be smaller forward. of opportunities

Adam Satterfield

I And their what a team, be really conversations though getting if out, Yes, they've volumes that with obviously it ongoing needs us. certainly us. still our needs customers to freight back gets year-over-year on for sales they're And Even just is customer creates our discussions can better, and their opportunities there got for to off mean and we some that help basis. down moved are are.

such there to is no shipment bad freight. that's weighted moved might can. freight, as capacity there a by our If truckload, thing poorly we've we whenever help and heavier that we're ready So is customers got priced have

believe use the trends customer about understand world changing transportation. do, we which to best see the that Typically, purchase increasing we the shipment truckload for the if continue The increase. to our want practices rates if cost be in have would willing truckload competitors we're structure. that competitors So of our effect handle to. shipment Many we a got us of pricing would has thing that in that would certainly truckload many of place, outsourced that good then I any the and characteristics all

go has have moving way. competitors our for the pressure that's got unexpected increase now normal put our rate some LTL So themselves to of business their inflation, to effect rates back that more and too typically going cost if

I direct world and So multiple from improving. opportunities a basis think both the indirect truckload for

Operator

from be Credit Landry Our next with question Suisse. will Allison

Allison Landry

said wondering, of QX? health I could that may Adam, some come and the us just that was group a in and in of in how much QX. give dental lower back I sense were expenses QX you know you

So color could just you help with wondering any there's provided us if to modeling. there

Adam Satterfield

mean certainly I Yes, that benefit. was a

rate we though XX.X%. in quarter about fringe target typically Our was XX%. second overall the And

I was we beginning at year, that that the about. something talked of think that the

we of quarter change were at And in year. so the the last XX% just and second

had say in So from fringe quarter comparable savings those million fringes I this numbers rate probably resulted, are comparing would $X and versus million, $X million overall was $X 'XX. of but what pretty just XQ period-to-period, to what of the we

the that some always They that a group that sequential time drive fortunate, improving there. well. savings the simply rewarded of motivate in company. of off for these And more that in will, So overall drive a employees, get as think little match is and income type giving paid things we down line we were some understand than others fringe They you our success of number, sort of They the to the up. for more see puts like continue and helps XXX(NYSE:K) having and the things basis, that health to it. quarter first our continuously and bottom doing There I things and our and drives and to was if on our second the were guess, dental it's benefits takes certainly give success. employees that we like

and employees our motivational that's So years over been culture. the our very we think helping a tool for

Allison Landry

this quarter? levels about they you are but how I with then, where And if but half? the of the in you. sorry furlough missed Thank metrics specific the KPIs. of, us in view overall I'm think sort of and could headcount I across-the-board, your could the give you to you second on said, give remarks, sense us just you improved productivity a if some think the then, earlier And in

Adam Satterfield

this Sure. performance, not we our average Yes, shipments shipments the had talked improved the give all quarter X.X%, X.X%, variable, I as specifics have we really we cost, that network there you service running improved our that labor of with saw look our that cost the element that on When cost platform are didn't a and X.X%. haul level line on pleased strong line-haul a serving XXX even for hour and running fixed basis. but per productivity, about centers, we mode the was really but shipment had before such. is light all of productivity hour per per improved at P&D And our productive that,

right things increase the So overall are wage getting we last per inflation. pretty much And at line shipment, that about to were with they back that's again gave they in cost X% year. how

I'd trend. to update expected a headcount. line-haul. We give little the XX.X% P&D overall we June, of the - we don't were June level improvement. time inflation that had year this an be based that and just both costs of comparing then in essentially but this of last were on our on So detail, down flat were we Dock But down had shipment and June year. our say, full per would employees Overall, in

back we brought furlough So program. many from people the

where were March, based about day in X,XXX headcount The compare And overall, July kind down compare where be about but back we're if is where April you than on we is X%. in we we you higher overall, are, X.X of about they June. look were which are in today should March. up to our per shipments and positions to If

in able is sales. We've less. be their plan. we've about save have, leader but made an go that we takes and employees, we're because what and hand we action But out to department So when that's have find think when like when seeing productivity continue, you think expect a remarks they the look back our go that them But overall like through hand what headcount the level we if some there. was of kind come we'd eventually back gone alignment going at each I should you to this, like, volumes, to we do we've environment now. prepared certainly and trends It figured with that, and those talked of And the the show through I in costing to with accelerating in of sort volumes. unfortunately some ways and through more more with adjustments evaluating fully don't improvement areas bring in costs we've continue to of will increase

Operator

Seidl will next from with Our question Cowen. come Jason

Jason Seidl

OD? them, experience Can bit definitely above your little but talk there residential I wanted for delivery, little said basically an about a doubling prior year. talk competitors little of a the almost ticked one bit with market your as bit for the you about saw the still uptick, the residential to down you It's a a they and how see the in margins percentage.

Adam Satterfield

the that uptick saw in think more commentary all. significant a we few of had. And hear a did at but about not additional I residentials. in Jason, segment anecdotally we of whole don't had a measure deliveries I of number we I do residential we one business, residentials our know lot

Jason Seidl

residential equal you better than And that the are the regular on margins? say would your deliveries margins or to

Greg Gantt

a We, Jason, on We our of for accordingly. as fee cost them based on is price we those We we you all them as there stop, the cost. and that, accordingly the accounts, price price on know. in price the residential accounts based of require,

better worse than other not that's basis, are think but businesses. the necessarily they an I account-by-account So or

Jason Seidl

been I to add business the complementary to some, potential is follow know guess, lines on in mentioned going my also And going picked desire that back from outlook. the We've that be thoughts Wondering to any up acquisitions I and potentially operations. up the would be your of little past you start sort LTL your your forward. that what appetite COVID. the as for here on the in a acquisitions of bit marketplace

Greg Gantt

currently. this Jason, that in we anything we're this we don't desk point, that anything is who across we at an along, we for exactly just at At not have as they an or always point those time, looking appetite what evaluate I I acquisition. looking but we're at is. And particular. At - currently, come have know maybe - not somewhat of time, the opportunities this and in

Operator

We'll Group now take a question from with Research. Scott Wolfe

Scott Group

I yield just the in it, sort Adam you talk the so, X% within in just per you but drop So of directionally, directionally? said tonnage, and day weight about if on July. missed can trends rev

Adam Satterfield

mainly lot tonnage. A is on that Yes. of the

little on And after and to down if that's of good opportunities, used acceleration back a back and certainly to feels where being to going as more produce some the being see a growth easier flat manage lot that, year overall, our quarter Obviously well. once see. last the a to yield, more which perform the double-digits sequentially a But the so to essentially lot will, and revenue to. were should back coming it up and shipments get bit, to time eventually to what and you've second it's and the closer got moving but kind revenue we're we get through can environment, that continue you we're we continuing yields yeah, is

Scott Group

to ask I question. a And bigger wanted then just picture

it's the And margins what there little or happening? next anything you lack way, you, is from I'm to cost, and revenue but cost volume seen understand else revenue guess unusual else? have you growth, You out is in standpoint, of biggest quarter. something hopefully. trying record companies of mentioned to some or this the congestion trying this and figure So to bit we've of we're you're a do not the trucking a and ultimately year seeing I how decade. fuel a just either put that think good going drop from And up just is this other I'm by healthcare

So next should I a operating that's getting margins mid the be 'XXs get just maybe question. about year, we were because the revenue, incremental strong helping but we we and guess a something Or don't incremental in environment? ratio? was unusual there get that thinking year, the year margin, to next is this

Greg Gantt

a customer industry. lot worked Scott, less and traffic ours, the say that been group we certainly than things money in in probably We our from normally just was on has past. were the marketing in There areas it the - favor, this. down less let the see. me marketing had on entire some but congestion Obviously some not health, were what save did entertainment, spend some

that things very think made clear down I say and cost. they had first we some that team dillydally, some We did took didn't on say we it a to what But executed had plan. were tight I when thing serious I'll this there to started, And sat very one management execute plan. thing this, So short-term a we made that everybody was and we do. as the

that to measures we still very We reduced different in was and concern improve anything we're to above have I of our was a service continue And saw and percentage claims it did it. those and that to own continue think standpoint, the continue used on XX%. all those. customers you time big give determined Our We from that to. type pointed cut didn't our service to our of are efforts in

shape quarter not business walk have to for while form slack they later any as think in did were standpoint. from accepted getting it, early they what the used we I saw way, It customers come may the in weren't they some price with that we And off So quarter. back our to OD. realize in started or

save But a lot to a of yes, we where that did money. we our standpoint. sales help do the there So, did things to from productivity had areas some we were some

proud that things and we yes a time. of very at we're happen good. this made in of Certainly, So, lot point

opportunity next levels there type of an we quarter. second continue improvement certainly, of to As is that we the productivity same that the far had to in have as year, think

our think, and doubt definitely election we've said we drive can but of year Not to go, that's we do from where there's sure good growth growth some point about the lot a we ahead, we're that however expect if year exactly have as and things later certainly through this the at going on in of I the times back. come year We that, challenges can, it measure manage where revenue You is don't bad. and it think Who lot the lower. going but a time. with to next any we economy facing there. in think can before, knows this we the all

that proven in we've the think don't I I but past, any think doubt. there's

prove will the that future. into We to continue

Operator

Stifel. David Ross from with question next our take We'll

David Ross

in Just carriers was as saw quarter, lot fuel, we to it tailwind seemed March fuel. a of was drop that significant a April little relates a for follow-up to good It bit specifically from a the in quarter, --? guy sharp the what it on a to be the in the Adam, that impact, of

Adam Satterfield

address end GRI much way back they the impact throughout in we've address then really where bottom years Dave, it to didn't needed year where our our to fuel really on us bit fully be, 'XX that little We when hurt lower a we came to other. the too table line, ago structure that next and and the the one a have or but tried tables got few of don't the about. really

of of was slightly So negotiated overall we calculations that's just fact net customers. that another do type try basis. envelope of simple back to is the and the minimal, calculations fuel these the negotiate thing good. element Maybe net-net, pricing, But to type try on back that's with do fairly it some to our envelope is and the a of believe hard

level overall or So, make if got our negotiate contribution that, their gives a that we really revenue increase, tool like element this rates somebody base they environment that then becomes the you've same fuel that, other to to wants got that of us in of look were with. take improvement type in an but an some didn't just that

changes your and supplies the environment expenses, of change driver the flat big overall with this you hit corresponding think significantly period, cost being make that labor then really we revenue like surcharge what cost improve and the it, to change typically to was that if thought me that see of biggest the with will, it fuel mask the a the those I the to the cost. you'd essentially we operating all I'll not improvement a our in in side, I a were to on hard you and that try our that in did accomplish to And the the cost was to comparison. us the was obviously say on like topline. the I hard mean call really driver on see so increase keep it's labor hit ability kind But So side, in And was in labor decrease of impressive down improvement, all so of a ratio It when driver in big as but the that fuel that revenue. able of much. operating percent of

David Ross

talk been item, steady then, has Greg claims investors or and long to And time. insurance for remarkably in a guys Adam either for you market expense been and thing little a it's you have a had another more low had. impressive just and the tough a insurance line probably worry it really bit non-issue something makes what you about on about not that the Can

Adam Satterfield

us, consistently cargo damage bodily two Well, and claims. almost X.X% elements and property insurance for this injury our accidents. that that's most quarter. non-existent And for recent improved a record line, call there the that our We fortunately The is in claims go claims auto into has BIPD. at it cargo and

way. So come a that has element long

really great we differentiated go ourselves really I back differentiated recession, to when ourselves competition. You of our when felt the we like from 'XX, the recession

We are X% from of we north get customers. is still the we X% where from that likely that, and average above that's believe and the feedback data industry

we've So down. that's that that driven thing good ratio consistently a claims

fortunate side, all of all the it's insurance investment like auto of them. we've and and we've carriers, then fact we're on facing just the training mitigation and now tractors have the that other continuous second very done. new certainly with accident the made inflation year other training but the in significant rates, been so over that forth and tools our equipment quarter, most with Dock we've that in type systems with this And On and and safety those our the and places the years,

there. And an line to element comp that in improvement in is so our there into hand goes we to salaries, with wages the in which is and continue And goes line, hand element benefits see programs. those this workers' there that benefit safety an is

been benefit I a and the place so a just, hidden fringe our think that think workers' big always there one, seen And it's a on improve safety the is be company continuously and the I but, that one line benefit, programs line that's of hand-in-hand. insurance those in to it's we've focus is trying comp have goes in

in keep low we accident it as hopefully well to continuously to tractors. some severity line on X% just ratios keep the low frequency can mitigated been technology that like has and by keep investment can And consistent in we our X.X% range. type those the that that's improve of try if of and So item

Operator

Our will of next Rosa come question from Bank Ari with America.

Ari Rosa

if result you've opening some little maybe kind business? might on elaborate could seen your in then some seeing was that supply benefit lasting into bit your get volumes you're to process I touch front and could that on details. in you in e-commerce of a changes it mentioned and how and the you a you And the Greg, So, on which think chains of demand a what big impact uptick pandemic, carriers. remarks, just as hoping LTL

Greg Gantt

some on side accounts accounts. revenue particular We those with on increases inbound see particularly. us big did did for e-commerce see those We type jumps the

I there end know lot we but thing, think home is deliveries participate in of that. a you don't and of of another kind that

So what was see we did on that which some good we're thing. a those accounts, upticks is And comments pointed towards. those really

I to those customers continue basis business think type we'll see of grow.

think speaking. generally So a thing for good I that's us

Ari Rosa

I be I home And still in terms weight you've from kind pricing of of its does or in that how business imagine kind vary terms as your you're vary of of going standpoint business pricing for costs. how years. to appropriately either - that do mean, of the impacts hammered does it characteristics characteristics? But

Greg Gantt

a they variety wide products. Those have very, accounts, practically have very everything, Ariel, they of

So, different, are all but yes, they into each priced account accordingly. is those vastly that goes

there other So is we generally a lot but of than accounts, of product. our speaking accordingly. think I anything Regardless don't will with the price them different

Ari Rosa

it, thanks. Got

Greg Gantt

of been to our the retail-related with our business. closely that business couple was XX% I align nevertheless, revenues in sector. seen It's were - growing. just growth that the last Yes close of we've over overall add has years industrial still But, going to that

this overnight. accelerating completely but a evolving been certainly environment and things are that's this So has trend change been going to in

chains to the to but the built supply that nature, continue inbound type LTL and quantity as we centers of be be those fulfillment around more much certainly freight feel things of they will the centers, like conducive landscape whatnot, fulfillment of terms and that be will both that In more shipments.

SKUs have in maintain area business want and of the we to believe they certainly so number can be winning already and in inventory manage to to that been quantities because that we've facilities. those that able And continue the

market have better and on continuing got confidence controls that time that carrier deliver to I I share. requires participate to that we'll and in tight a your the continue able certainly, to that anyone be give than to do and we little to that business and we've and You've think inventory without element think us damage proven of

Ari Rosa

question operating impressive. this last and this I then just is but really know obviously, And touch I ratio my wanted guys to for have addressed a bit, the you on,

we margins occasionally provided thing sub for and talked kind the it something based to to the XX you've on new on, to to be would quarter, it step-up a this cost should XX% appropriate be based in tick range, on about a us I kind impressive performance operating sort congestion of deliver. the where a in of the you've back of you On of incremental that is kind think ratio up the see able expect just be view and you're past surprise for a and be thinking front, looking and if the highways is plateau then returns about that

Greg Gantt

the also down on ratio around level. it centers we is them value then long-term we centers XXX the thing on that most continues element our and keep be there to the employees you centers we've is it's both. drop focus to to all as improve opportunity service dollars at over back, invested require this and drive for long-term we saw the ratio motivated mind of long and that when increased individual improved The service there each. density the prepared we into do into service some operating once think us has capacity the and It's business to what's costs to also that know operating that service and years we're for well. be We've matter both typically cost certainly service lower ongoing that to and individual we those about those, inflation and itself to need we've to we that and important our that factors to positive generally door and give yield the operating that savings back Those big be ratio, to but going key up in other cost it's look have opportunity the Keep the center to to our has and come our service we'll productive country. be give miss the look keep per been our all density, roll there expanding when really those. company you to we've out that employee driven regions When just low keep got that's the you the revenue care will got might to two service build all got gives And we that group consistent ratio will some factors economic we're come and support and should consistently operating sure opportunities. the so continue our we've continue revenue so We and revenue and make and got those to on them ratio, but us curve, have that allows want When culture really expanded continue driving leveraging don't family to backdrop really can ratio because while with increases improve that that ways to cost term larger operating drive improvement do. and we mean the facilities, it that the maybe much that of own cost density engaged rate are the to the I allows look in to and customers a well average. but you've fixed taken the confidence continuing quality most of a to us managing as get and can and provides this we the a of the our on and our just look continue success. is

Operator

Deutsche will next from Bank. Our question Amit Mehrotra with come

Amit Mehrotra

All been have the good questions answered.

answer. Asked to

one. I a have couple I'll to So, ask bad guess, of

if sequential won't is quarter. actually movement I me forgive given XQ the was want the volatile, be weight XQ, to And what's about So moving the from why I'm in of output just down think went side, sequential, parts. an then maybe OR correct weight more Adam, but shipment wonder the happening think I output the of me. about just especially per the various you I I'm challenge, I mean, shipment kind to of of as wrong, because towards mentioned that per end kind know

the mean, think going shipment represent, maybe it's weight you're as to parts. as shipments, about I of adding just maybe that OR an the we up, kind headwind per doesn't coming resources shipments on but are moving wouldn't simplistic, down, represent incremental serve overly So

you If about that? can talk

Adam Satterfield

work lot of parts a way we there are this as I moving through certainly now Yes, environment. mean, our right

our weight have but to all weight so, no our But pricing quarter. we will low can. think focus maintaining to I lower a up keep coming per revenue intent year-over-year which shipment continue was a per last on pretty high, we on And that yes, year keep basis, in little - is if philosophies, shipment third per bit certainly can related anything then revenue we'll the weight quality. to the per our our shipment, sequentially, And change down, that shipment

just like, can run for seeing sort then from if the If you July, to in of out that trend the the individual you've on again that you'll improvement talked that handle, we put the got earlier that's, have shipment kind margin. we're significant same cost revenue. compression leverage a per this little growth, of sequentially quarter revenue But shipments in getting

end to closer of overhead And as be able from areas any weakness. I though down biggest absolute cost we costs, the our the line-haul maintaining average expect the our significant - comes the XX% were should aggregate our operations, period and our that cost but are revenue you're is a line-haul a we that revenue about earlier, second a type our the basis the It's semi-variable. were so, improve that cost, in with if of going not work on all that that those network will and leverage to element of come we a offset they of to have, it show other back lower lot that that all the we revenue. of productivity when focus, a the revenue there the more about quarter, in weakness. year-over-year obviously to cost sequentially got labor back first And were into range. can the overhead to second the quarter that XX% there get the on XX% we typically statistics, talking that's And that's revenue in then assure as should challenge increase they across second of and just of can idea. have, cost that even costs and leverage to we and quarter again that lower lower increase density cost be will you But of we'd due of the keep percent And in took, to the of lot Certainly we some improvement, the saw as to we all the action than can XX%.

more back much So than certainly, the related weight shipment little pressures to opportunity lower us the should any that other per should coming density in present. bit a revenue, give

Amit Mehrotra

you missed don't that sure tonnage not? if you about I had mentioned year-on-year then, if talk it, did July? or in I wasn't I And

Adam Satterfield

done of days and given the but was. neither the actual said, sometimes month number exuberance in sometimes just day now call though and we out got I habit maybe that got an between of even number and the then exact Well, July panic number generally change and left, we've two was the warranted the that of and then middle the interim is the of created or comparison giving what

the we'll I these I So about see somewhat next X% point plus revenue weight the talked of this at end that is days same of in it, revenue. minus we're the that down - is or - two where kind per weight around up guess, And and with is we day down ballpark. of but somewhat sort in

show certainly in to that June. as continued June. a encouragement through to falls a Typically big of trends the third usually revenue has that's of to us got higher quarter where July of go quarter. lot day these we revenue And is third in points weakest if So July, actually continue, a revenue see the strong with And continued because a couple improvement and been month. the per benefits that provides July and that's from we've the accelerate really is the were month we to month is a July from see, off

while certainly giving to a So their these on levels they're our play business business out gives been the see of to see wins how we'll be out, to some continuing reopen customers been and but the even to to increase encouragement continue the to able team lot trends able of of us new street, - be calls. an create, sales really that out making our sales us hasn't we've

lot them team how been and customers. way to relationships but the our operate, and pricing give it's a got and coordination having they engaged So to effort, stay sales, between the change and continue team cost communicate, sales for strengthen a to our coordinated with of credit our they

starting big only a third our to go that's piece the quarter. the numbers, not but see as improvement think that long-term we I of we're into

Greg Gantt

of the Let And, me July, improve our the in June. We month to trend continued and revenue very look they've through saw consistent far, so that. add down line. start be they to

per things at look hundred of all from far. all very per we consistent they're weight measure standpoint, and so those revenue that good revenue you different If and shipment per a shipment, look

But all. we are at concerned not continue. trend by So we hope that will encouraged

this We are very at encouraged point.

Operator

next from Goldman. Our Jordan with Alliger question come will

Jordan Alliger

Does up, competition advantage is picture been question, competition tails above tremendous direction. always the the generally impact part and your is in competition itself, a space. doing with wondering, remains. head the it you the right or still of Just have that big standards the gap everyone service competitive things I'm we're or so between industry advantage else catching the competitive in and LTL just the

Greg Gantt

has cases carrier-to-carrier. say, service a standards and me off, let first they're similar of very Jordan, everybody filing lot

low And better. service part Ours are wider runs a big than that's of I is and A is competitors. years over there And on just talk into service. B lot gamut all things you about on think look our in if OD but think the I are claims lot most it. we to big still a that done But to our A of with line excels goes of we've ratio, time. a compared that And time part a competitors B the at other that's it. to where

to when of and are Whether person times, know and just the we day. why what comes There a lot I And far talks phone at customers. end with Dock or better timely is, deal because how Making employees the think than execute They they price. basis. competitors it's making the on our but answers that relates back appointment our back office of the Our I our getting in price, role we pickups, of that's they it measure engaged. their think lose that on into it it back day, service up those and all we're awful service role it our as every is elements the at over service. to And worker that business things. day-to-day customers, sometimes an and of go getting the we're

awful of it's and lot over off. that We've the work that there years that. paying goes lot So a an into is put into

focus customers. will our in we our to that area continue continue to So and commitment

does So question. it your difference. make a answers that Hope

Jordan Alliger

Yes, that's very helpful. Thank you.

Operator

And Ravi come will question Stanley. Morgan with our from Shanker next

Unidentified Analyst

me Ravi here. for Thanks on in Christine Shanker. for is squeezing This

side bit on guys over again are more And couple be the the guys years, and to or so, between next shipments any, lines tangential moving like blurring to and you policies do of seeing maybe getting I seems any on TL of circling a back to to TL that, the expect some side, of LTL there? the seeing forward see the you shortening the think, commentary around operation little kind heavier, e-commerce a are you sort and quarters are sort of and any theme of boring the LTL of

Greg Gantt

to trend as be honest And TL at we're we if all to an to a think the seen in tell our be of the late. shorter, we you, try but consistent of anything, been very over bit Yeah, of length suppliers get no. seeing I with business. increase haven't honest several customers, I with that closer little can their you, that believe to last haul certainly, get years. the has would Not haul

a pretty So blurring lines, is our big if There still there distinction. can't it. is see we

Unidentified Analyst

one follow-up, picture. And bigger then of maybe sort just

As vehicles, the guys in you you developments from shorter the know, we've electric other whether seen haul, last around, operations that of short-haul in some with some your evolved of in months couple here? the last maybe at for months that's all P&D of strategy couple the or OEMs

Greg Gantt

that technology can't Well, good, us today. issues think to for I of it's yet. practicality our this, of - work, not lot yet. it. hear I it's know say the particular sound I'm useful is there not don't has evolved point sure that a the see in we still but all as There not all make stands it that things We technology to that read is it the and just company, currently with

we'll will think will a just with just but than think yet. and see. down I the will I there There at there, is it sooner it this it, to there issues not point and road it So continue hopefully, get an wait evolve of and later, application is still but be maybe to and lot have

Operator

And turn that like session or any today. conclude for for back Mr. question-and-answer does additional closing remarks. conference over I'd the Gantt our to to

Greg Gantt

day. thank call Okay, all questions. great feel for free We Thanks. have your participating hope all appreciate you a I further. anything you to you have us, And today. And if please

Operator

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

disconnect. now may You