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ODFL Old Dominion Freight Line

Participants
Greg Gantt President & Chief Executive Officer
Adam Satterfield Chief Financial Officer
Todd Fowler KeyBanc Capital Markets
Jack Atkins Stephens
Jason Seidl Cowen
David Ross Stifel
Chris Wetherbee Citi
Scott Group Wolfe Research
Ravi Shanker Morgan Stanley
Tom Wadewitz UBS
Jon Chappell Evercore ISI
Allison Landry Credit Suisse
Amit Mehrotra Deutsche Bank.
Jordan Alliger Goldman Sachs
Ari Rosa Bank of America
Call transcript
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Operator

Please standby. I will now turn the call over to Drew Anderson. Please go ahead.

Unidentified Company Representative

Thank you. Good morning, and welcome to the Fourth Quarter 2020 Conference Call for Old Dominion Freight Line. recorded through be dialing February being beginning for XXX-XXX-XXXX. is and today XX, call and available will replay Today's XXXX by The XXXXXXX. is replay passcode The accessed also the webcast website. replay days company's XX at be of the for may within financial This the meaning and of including operating Private forward-looking regarding others Act of statements Reform performance. the among conference Litigation Old contain call XXXX, may statements Securities Dominion's expected

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

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

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

Greg Gantt

share. our After will today With to conference some is brief our welcome company and to to diluted quarter in revenue operating XX.X% the quarter new a Adam your quarter be increase to fourth and was Old take in in our glad call. morning included increase we an questions. earnings me This Dominion strong ratio on record. Good fourth combination remarks, the XX.X%, fourth which improvement per call a that CFO. had led Satterfield our

company ratio XX.X% increase in a as produced also we record year, XX.X% as well of the operating diluted earnings share. per For an

proud these more claims rapid the winning our on-time us changes continued a proud OD this to operating in These volumes, X.X%, who established tough XX%. record am While work ratio year. conditions Award of Quality while success. financial cargo the our of results, XXXX in challenges XXth through new am Mastio for employees of at at Despite pandemic generate contributed team I really by family created and for the factors straight the I service to the

Our team stated is why circumstances, the make. includes opportunities. have the committed to most is often price advancement the that regardless as delivering pay as things such benefits and superior many fair we strong our OD as we packages family service This is in at and important well investment investment programs which can a of training

have allowed our addition These to their contributions together strong well family the $XX us factors initiatives. important employees additional consistently by talented that In further March retain our intend bonus is December as as our special culture approximately totaled XXXX made the in during as payments to pandemic we to support our attract million. increase and XXXX and a employees, hiring non-executive family OD growth to capacity employees in we add to to of This workforce.

service of growth. our this support fleet network excess the we few January ensure of intend facilities next our years. one the in of network within the network is centers within locations also to overall several as to approximately we some service more these plan as additional capacity of expansion We and increase to during in well additional XXX the eight improving quarter first We the over our capacity to three remainder in in environment improvement, average demand both XXXX that more XXXX. year, the will open the have two new After a opening additional the existing to center not currently with and add operating believe service are of to and capacity growth factor the facilities centers year. With XX% limiting

win uncertainties While XXXX. positioned Old share domestic we is acknowledged we that Dominion certain in economy with may uniquely continue the believe that market to additional

XXXX. We operating the ratio even than established we also that we lower can record drive our believe XX.X% in

that long-maintained favorable ratio improvement a in environment. and have operating both macro the for generally in our long-term density We key both require our improvements which components yield, of

improve the long-term core can plan our record we in has many strategic put profitable from also fully execution that strategies us that measures of XXXX these indicate competition, Disciplined while strong by over trends position. remaining current long-term competitive of business years course creating on both the of of us our to differentiated Our our committed growth. in

advantage of our will quarter the increase in to are financial revenue us shareholder our we in detail. our that results morning our We Adam believe encouraged for earnings now fourth by momentum take and trend recent discuss value XXXX. can Thanks business greater joining and and this in

Adam Satterfield

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

the in increase LTL non-executive to ratio increased and earnings tonnage pleased in included increases to per paid include the X.X% basis a operating revenue increase both a in share $X.XX. increase related and per X.X% in bonus and We LTL which million improved yield. improvement see results growth The in our to volumes of included expense hundredweight. revenue $X.X in revenue diluted points special were employees to XXX December. Our These XX.X% to

by business and per pricing revenue recovery our from increased sequential day for increased X.X%. was reflect shipments than pandemic. the compared trends LTL X.X% quarter drop relatively trends as the slightly in a average our was normalize, fourth above continued quarter initial this both consistent revenue our per that with April our consistent. while while remained to the of These fuel the third longer-term increased The per revenue metric hundredweight more to day the surcharges, in On underlying are have normal sequential related quarters X.X%. to basis, continue XXXX, growth recent as Excluding LTL in mix

For our tons as increase to per compared This per January an in increased LTL an XXXX. revenue of XX.X% day, per increase X.X% in January reflects LTL XX.X% day revenue hundredweight.

the We improved of shipments fourth platform fourth operations again percent operating of XX.X% of included the to Our and our with When in operating in hour of fourth was improved direct quarter our hour. per did lose a little mainly due as compared efficiency number per increases employees once average quarter. quarter ratio hired cost to cost and XXXX that overhead with in both P&D we a our new and generally revenue. the however to laden-load shipments our productivity the improvements

volume our to -- improve during fourth trends we the platform employees first As intend quarter. continue add to drivers and

supplement We our a continue purchased transportation to improved capacity fourth leveraging workforce with cost discipline our during anticipated our growth revenue to discretionary and to overhead fully our expect the also percent successfully quarter use of of revenue spending. maintaining as We can the our team our until growth. support by

indirectly to that discretionary do, and the be for expected while approximately this but to $XXX were to spending cash for of replacement will center to or always capacity same due We million pandemic $XX.X execution Old million and capital and our shareholders in costs anticipate increase the cycle, either eventually XXXX further we Dominion's our expenditures as $XXX.X growth directly $XX.X we during respectively, will amount our certain that periods. of $XXX million $XXX reduced although equipment and XXXX. were in We restored. capital for year. control we would in are be XXXX capital XXXX of that identify includes continue million into to additional the the from the anticipated fourth $XXX.X service on expand This we $XXX.X Based expenditures flow fourth network fit strategic the and operations quarter our long-term the million total million million million the if plan. returned properties quarter totaled

began in have after effect March dividend split the of in program dividends. $XXX.X giving XXXX repurchases to were For XX.X% $X.XX company's approved stock total XXXX. that the share the of $XX we Directors increased in to Board our and share We pleased our million a increase in each cash XXXX included this quarterly we of per this year. in of and dividend quarter first in of XXXX X:X XX% Since excess million

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

Operator

Markets. Instructions] with first question [Operator we'll Fowler Capital our from KeyBanc Todd take And

Todd Fowler

that can Adam, color you looked morning. going me this, seeing than threw bit a provide good increase more the you in tons per little and Maybe off. Thanks Great. December. wasn't January the day trending stronger with in your you're start what you was to in strength in but I XX.X% on

driving be -- that on you would color in have strength had if So you think any you any color the if what is great? January

Adam Satterfield

Yeah.

through to I think of that XXXX. took it's and it their and I point a since, around from getting just different speaking. acceleration in healthier, for been Once well. mean, continued April we customers forward reopening into that and fourth And drop, Todd. think we really the us January quarter going began regions initial with accelerating it that of certainly, businesses country has sort the just I generally accelerated business couple back of as things,

industry when respect we're is advantage the usually center in changing network. macro in there great trends. think, our spot service a position is these lot type our environment trends of the to favorable a think of think capacity certainly our a This an and model of the I of We're shines that I with for enviable are to brightest. take I

trends long time profitable think to that to start little to we're seeing But, good improving is of to certainly, seeing fleet the XXXX. to But good fact spot and little in to able to we're all advantage it's improving continued play since of able be growth make we healthier, continue I employees we've want and supplement as and been to this in January hire also about well. which we're advantage and forward able take talked to look growing, endeavor a of now, we've in and customers you're use new show general this. to that a purchased in we've right trends coming the business are transportation like and through in sure been a when we out it's we're those see growth, growth us, continue for our as getting going model Our that our shape, are needed. a And successful just business in and

Todd Fowler

sounds expecting you Obviously than sense No, shipment growth you're if of Can And the good growth in a color counts. -- half continuing give trends the the bit you for fourth the to headcount leverage, quarter. to how about Thanks. of little headcount quarter, Okay. head the good. able what a in adding expect then, sequential did the of in continue first just headcount us that to growing more of maybe increase the you and prepared long shipment growth? count give maybe ahead kind you're you'd the be first to in comments, talking a can faster job count

Adam Satterfield

certainly they're long-term, in but as service period essentially our pretty headcount long-term. of our part matches Well, is incredibly that over much when last over in trying kind to you the operations middle in change shipment going and year and for you record change the metrics the and now in the and seen pretty in balance, that again something service much adjustments, us. we've to always team as counts if Right a have not short-term of will, we produce keep the continue well, we been to to really made working to our up play back been has catch-up hard resource and know,

but the team been hard. really that, incredibly we've of So working been has proud

have increased transportation. purchased We been using

a fourth the of XXX% is quarter our people because noticed to you have typically the and equipment, average quarter around on our and headcount using be. supplement we until to flattish completely really of up in to kind had and for our that us had network we like increased to fourth in-sourced quarter. and where the want have can to in If bit line-haul staffed we first but X.X% with X.X%, Typically we -- is little

Todd Fowler

Yeah.

Adam Satterfield

XQ. had And able increase achieve January, we've about based of thus in far the maximum X% over seen a on was where think we to I what we've XXXX sequential that in been XQ ever change

curve, can up we to in able be we reliance that can we've to higher, and think will, just to reduce as both our you purchased for our XXXX. first volumes on serve transportation, to range be ahead to so even back then but as I XXXX customers continue try effectively just the got our get whatever if of way and and come face catch well probably

Todd Fowler

got I'll it this Okay, for turn That it. makes time morning. Thanks over. sense. the

Operator

Stephens. Jack Next with Atkins we'll go to

Jack Atkins

Great, you. for taking guys. my thank Good questions. morning, Thanks

OR. guess seasonality, So, relative quarter sort in here if OR given of than when again, in to is from the of quarter think typically the basis to tonnage special think headcount seasonal back the first you being about fourth that we quarter. the it's Adam, about about When January about out bonus to potential, sequential progression quarter. XXX a there pattern, the you that think normal I ability XX.X kind fourth with How I in the points payment better to degradation thinking which your normal tonnage question, comments there sequential you leverage to Todd's are early XXX the

think about tonnage sequential some the of about other number items base given what's are the you comments thinking those given if P&L, the change, headcount of how happening that you and XX.X, down on front? So,

Adam Satterfield

Sure.

You're right.

that The that the all quarter, like adjusting, special from was that's XXX insurance see you first quarter. XXX bonus is. was degradation fourth points you that fourth what that's I out, probably and than was a little The for one the our but can that's typically basis claims items, something the know not only the other that quarter thing will certainly some in is lower bit example, normal thing, big trend be but of to called

like that increase increased and X% will years. and the going back some around anticipate premiums just and to we we're carriers, to so we with this forth facing many of So, revenue, inflationary of faced X.X% normally like we've other which to where insurance is that it -- couple be year, that our costs, last see

of for some be So, stepping where think there's get one prepared referenced programs. some travel and will going expenses in and I advertising and costs certainly, some restored not travel another to We're the is this we will to our certainly can that anticipate around will some sales remarks savings to puts sort those and there entertainment, it. be be to so takes the marketing expenditures. be that our up. our with team of is and to at some do those point things, some foreseeable supplies We some year be restore out but related General that of going future and still and customer intent of

quarter. than anticipate that may were where and they while back higher between the So, cost had to certainly X.X%, not been X% them being where go we fourth in

talked a sequential growth wages give ourselves the salary, we and So, that you we on on change against, quarter quarter, and on felt and to expense last a cover there to productivity, is type trend improving of certainly and I in use nice don't basis like could we we our call, from advantage normal on well. we the trends going when felt a always as fact that guidance fixed And We third based leverage on think it. keep performance think We benefits strong enable those and was us in benefits those line Have kept I in a more change lot we operating long-term to the be what to costs benchmark try wanted to quarter takes. there. in are in just gives other revenue line elements some on the ratio, keep and that in but some measure to with salaries, we wages leverage of puts revenue of that. and fourth the quarter like that revenue sequential fourth from create the the line, do them being take we going saw to about

to And to XQ in be able that adding people. salary we will those certainly, as you from though will into cost, if be and -- new well line when keep us leverage bringing so, XQ even go think will, give I on we the

So, basis a mark in there'll but benchmark line and and we'll that of will I be puts takes good we sort items, XXX different think see how there. be point from just perform

Jack Atkins

Okay, market a as you, it taking last, been growth. lot years, the picture I Dominion The makes kind been that look of market great lot your in question of When a for the no, service. for underlying over, has really have over broader and back you sense maybe a bigger job XX you hasn't color. share LTL thank call my follow-up you for all investing of Greg. to XX question, in business there that market investing Old a just and done guess guys

As sector. is but five, and your I the you impact is broader just would having you market look to specifically the you over seven the accelerating thinking out years, the share, going. would be to market curious growth continue Greg, to I industry, and OD of do the middle e-commerce appreciate I'm thoughts see expect e-commerce about where LTL across three, take transportation that for mile mean your on see to the there? get sort going industry Obviously, thoughts next

Greg Gantt

-- see we I growth on in in LTL would the LTL the would our -- some hope side.

gotten the others Amazons somewhat fact world many to closer so whatnot trends positive country distribution all for many e-commerce the the that that actually and I facilities and across are LTL. open seen and some of have The of we've think have all customers. the

when of getting in customers' shipping and lends that quantities facilities hands talking all about hope to smaller type truckload to suppliers these that are the quicker. then LTL versus itself different you're you some So,

think from So, positive I certainly. standpoint, an a that's e-commerce trend

I really years, as boom don't a packages. think couple telltale. well will certainly as last think of we've be I back maybe huge economy does certainly truckload the some I the the in just that XXXX, macro had of two, so will market the to How and not drive our small in in do? broader the last macro think it not but the

So, compared continued think let's I'm it's certainly expect but boom be last strength from over certainly do growth, will standpoint. hope certainly I I that positive. But think there not and XX steady some a certainly. expecting -- we that it to years, the is

Jack Atkins

Thanks time. Okay. for the Great.

Operator

to go with we'll Cowen. Next, Seidl Jason

Jason Seidl

Thanks do is operator. to bit Gentlemen, you good us us about morning, hope a little tell Wanted give went everyone And could idea in how quarter? the well. contract talk of, or that what pricing, now an have purchased UPS TFI, the of, you there discounter going marketplace? sort follow-up. a been that then, more a, expect has in forward, considering then, have been Freight And I by of

Adam Satterfield

that's being increases, And tariff-related the -- was Yeah. our us out And that's of support throughout those worked pretty certainly think, transition make all philosophy that, it and into technology. pricing able well is generally think year. a four renewed to success contractual and contracts continue get We that's quarters But costs capacity would business. we had don't we investments detail year, for our expect cost-based. we in XXXX. the to done above necessarily and last had as as us. We I been continuous we I service what pricing out, versus and expect that, to speaking, to give customer each business we've And

Jason Seidl

market do them much? UPS on Freight purchase the with into too or comments those any guys, not of of run that the -- you and And

Adam Satterfield

specific in that, certainly carrier industry showed when of working lot discipline, was through of a comment I the second think really year, one per last want quarter especially to itself volume lot don't I there the pressure. But a se. on,

offset There's, industry favorable it's is certainly generally we may that that into would a And then, lot capacity a overall of of services, are across would lot the factors their the are that's carriers of have think in expect cost our incredibly now. rising good philosophies that So may getting strong, type go for that's well some see carriers from we been from that that to facing pricing of are. other transportation but we generally, businesses. inflation perform And truckload typically that in limited, a of right environment XXXX. certainly cost space. just for very been utilize is demand are slightly that supportive than that's customers more those be own inflation pricing certainly different feedback the which industry that, faster be line-haul rates environment some carriers I And as initiatives, other are the to LTL certainly

a lot of there's for supportive think be factors pricing to very point I should And favorable that pricing So our initiatives. of certainly year. industry would this being

Jason Seidl

to a seems is the it agree would those pretty us advertising Could do be the there is question, you coming to of an mentioned marketing that give Adam, magnitude I backdrop business. for going Yeah. of like you some costs? the costs quick good LTL Wanted back. idea

Adam Satterfield

split And what spend some never of programs year. really deals. last on hold put we've we out exactly, speak. Obviously, national some we kind and so and We've big where -- got to

to so, since affected higher forth, but I to maybe XXXX. where of be by quarter to maybe that really they've and the might go -- back quarter and you to started see that the in indirectly some kind somewhere our to that related are cost end be the between were just expect than up to they expect X% the we're low it like we the been be of higher those in some the to we've but we're temporary it's address couple trying certainly second third We'd to that back the than at something of items the full of seen if coming lot extent will, and would cost making changes more directly A cost those not hopefully supplies not of necessarily expenses those or And in the of That's X%. past generally will all initially travel X.X% range, expecting that in earlier, second more line. in year, general be so -- certainly some quarters. quarter, but that where were savings pandemic some calls what continue those costs permanent last think X.X%, past speaking, And and maybe to I it. to kind of of mentioned X.X%. The of

Jason Seidl

That's very the there. I Please helpful. Listen, gentlemen. appreciate always. out safe be time as

Greg Gantt

Thanks Jason.

Operator

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

David Ross

Good morning, gentlemen. Yes.

Greg Gantt

Dave.

Adam Satterfield

Dave.

David Ross

less sometimes to Adam ago is So, stupid stuff impact? stop, that is more biggest you're you or thing years advice. the that has is one not What the good now, or doing five that were doing XX made doing maybe Greg

Greg Gantt

have might know, a think, further I maybe I don't your me but... by to doing things, further stupid we back go took little it I kind I than quit David. -- question that, surprise, know of than that. don't

David Ross

that way of Well, just a if in doing XXXX, started. anything you got then you that's Is that because, were XXXX the to you go the there I kind service back that when know lot of improvements removed?

Greg Gantt

ago our back smarter our we think exactly the of need, out think what want of better we better day. and pretty at just those years. continuing gotten We terminology win it in better. the of we dependent really needs, that those we we growth the We think want meet not modes purchase don't were today share over were some and needs it's to the and I were customer things, So, some they for is stick like do I did certainly. I the how somewhat upon good MASTIO, to lot I competitors And are large that service. I just say a maybe indicative whatnot eliminated our which years we've understood gotten gotten than by what We've and of we do we've and stupid and just a that's to right we're over transportation. what but line-haul years, they think our better figured in really used measure

done what it's what state done better so way just we've done, did our to we've the competitors what So not maybe stupid I think than we that's and have but smarter it. best maybe

David Ross

terrific. is survey MASTIO The

to you've a else system the better pricing talk your had to little it's where bit because raise old focus wasn't customers also and on along the you rates side, been getting that it key things don't and the want rates get about few Can on way, where do want there just pricing you but and a go? have always you Something accounts, to to leave. to to done you or process the you smarter model, Is case. need

Greg Gantt

gone all are the the on, disciplined dimensioners what be cost movement, over as delivery we And service. put a Well, have the think to the all in exactly needed then us systems I the whatever. poor, the we've and raise be and David, service to P&D, understand service your all the you're hand-in-hand truck give goes our technology pricing click been techniques it only much our be way lock put sometimes with position the prices going on and really the better got I we to just helps is years extremely years. the a we've Once When rate. line-haul, be in really shipment were and is it a it it cheaper better to think that the

think we certainly understand our I XX we did costs ago, on better understanding. executed than that now certainly and years we've

drive We're think are thing been think numbers no sets us for us I sure. to be. and that helps we our I that's and to in disciplined, doubt we'll know huge certainly certainly one our what apart that's continue for So cost

David Ross

much. very you Thank Excellent.

Greg Gantt

Sure. Thanks David.

Operator

Chris with go Citi. to Next we'll Wetherbee

Chris Wetherbee

morning. Good thanks. Hey,

or at margins your versus time cost the least and perspective, but the OR growth additions resource volume little should at double-digit range. think number but bit about, sort generally inflationary is be Not be to rule XXXX? a the -- to time XX% you labor anything I XXXX a were, If more XXXX, about we how last else of we're you and use growth might a don't there you of I relative if outlook challenging, around, see from the is trying the tighter if course go XXXX that looking to or to rough there when a about that look guide thumb for timing as back the to to maybe with is thinking now, XXXX, the of, perform this more know like you of we of should guys tonnage cost your you potentially for incremental thinking anything specific that of in the guys

Greg Gantt

profits if Certainly produce through almost were despite were this operating fact proud of going you in lot $XX day pretty the challenges as revenues of lot being million. face and At be $XX of in of I increase the we growth XXXX the a about end our to comps the despite top-line revenues we and certain million to that might we're generated a year easier we income down go while will. the down. mean,

some certainly bit might and and higher back year. I inflation comps, this a it's we've we'll that So some term to around per I tough in but cost average, probably general think looking got that see some back the will And we'll see respects than pulling at this a our this shipment year. anticipate cost but of that little some have mentioned think type higher inflation inflation sort little bit I us. expense healthcare factors anticipate inflation we longer coming would supplies our be X% of

we to So benefits for our pressures we're going and salaries, categories. to other program some inflationary see cost We continue inflationary our always have some in X.X% the as employees. improve wages of a that to X% in

what able the much there. basis predict through way and density in to year, just then plan profit about enter long-term those And both. there we a inflation improvement, toward and drive work that know didn't goal that we'll in as think all we're and so our making and talked up operating year, incremental of and se but be try but operating should we good the through to XXX we're certainly the of talked in and not to to incrementals lower. should macro and driving set XX, managing spot lead to and is which gone progress per through certainly long-term get we operating going be that that kind about have then to Nostradamus the of line will a of the for to our points saw metric through because and our will as years becomes we've we had the that goal And go bottom philosophy And factors flat about keep XXXX. we've to the I year, key increase this I and strong we're into for, our produce think work we and the or don't talked last in as target continue can I you put we be of slowdown some growth would target and necessarily a the XX worked that yield, I the success ingredients each out, trying it saw the last worked year, that being ratio a to just think certainly the having could long-term, But to that, we that we'll would improvements ratio in that, month-by-month nice is to from the we've above we reality of expect working to two thought business the some proves We've rate keep cost XXXX. quarter-by-quarter improvement industrial sort as year, so position margins, a create ratio I we believe just

Chris Wetherbee

it. Got

here just so, of there helpful. to available us deploying that to opportunities about a in maintain the sort up you've relative talk And of follow-up little move you XX% that terms roughly do to want you'd like that? you stepping capacity know talk of right Is coming a you budget amount capacity can XXXX, I capital? And see as can about that the and given CapEx bit then quick very bit sort that available how have That's understandably thinking you forward? some of but breakdown, little Okay. obviously you then the into

Greg Gantt

we're of to year, excess XXXX for We expect continuing going service I now probably build out center seeing with would pay our that that kind volumes certainly for us increase about well. capacity. this think plus is XXXX generally sort as network and programs or the dividends continuing talk of CapEx of XX% the through And in minus to XXXX and and

years really health our and opportunities. have eyes that trying effect benefit We're for real Certainly, sort didn't of before our become plan just think the year that's But point. on to look that properties a pandemic We've cost strength of of network cutting look we'll multiple spot. XX a the real pull to plan the XXX, to equipment good see is we out on and was mean, we effect down I more side to continue and we that some the in back growth we're the in got had maintain years to a good business. spending if still and to to But and the the But that at on that, keep CapEx peeled, big look plan type normally and and got starting really things was expansions able multiple long-term estate list and and year of we those maintained a good XX depreciation make when fortunate So, estate, for and there. we be and the was to would our on available. on seeing started last to road. plan a we'd the trigger we the prepare our I the just we we've target inflation continue certainly was see were a and that going part

Chris Wetherbee

appreciate for time. it. Thanks it. I Got Okay. the

Operator

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

Scott Group

morning Good thanks. Hey, guys.

follow-ups. of couple a Just

can about how update, service just you then shipment year? centers talk this the First, you many January are trends? per weight And within adding

Greg Gantt

Not here always only completed not say on but three working really and may close opening three months another another easy It's first if to so nine we And to or opening so them close of so that open or to first to finish, half that dozen or on really, sit we very out if hopefully, we the get that not. not there. are exactly we going top we're what we're dozen half that then, additional depends, quarter, centers, service the we're just have certainly second. have in

Adam Satterfield

increase And January, in X,XXX weight per the see on weight was pound shipments. then shipment, there so was per X.X% strong a continuing it to which

if heavier, But is weight Our of healthier still if bit leaning are to up spillover in average. making of you customers now a little business that terms economy in little well. will will of on just network the think our on a it's percent smaller is normal, you back that a seeing get I the shipment reflection the number some our of right that that in freight per the a larger It's a business. coming into some and higher accounts strength coming our national have on strength probably as type and

Scott Group

think? Adam, then in PTE to headcount more you how do XQ, think is XQ And you in you growth back back by Okay. PTE the spend normal you it or quickly with higher to normalizes half than do expect get normal

Adam Satterfield

last XQ. a top-line and to going it's be performance say, dependent drop unprecedented we hard the strong upon performance. year like was It's really sequentials because in It the sequential through going certainly, to had And happened but XQ to we're everyone XQ, I with starting performance the else going into XQ, from here then out strength strong and January going in incredibly think into XQ, well. then experienced as reverse some and

with capacity volume sort to really until of of team continue we're it to going use of growth that the we're make So, seeing. catches the our up

higher, So any to of we're now great I I on-boarding people right don't think go in necessarily doing expect and pace. it a -- job keep because wouldn't

expect little certainly -- where think the more a seeing it's in again, second, to going with the with be anything. it of pretty start second but we year, in stay first hope it So were XQ to driven quarter of can top-line bit half but in be that we could a just more we'd would the consistent and it than I reduce

Scott Group

Thank you guys. Okay.

Greg Gantt

Scott.

Operator

Next Instructions] Morgan [Operator go Stanley. we'll to with Shanker Ravi

Ravi Shanker

has in want the questions. the driven significantly industry that over about years. It was morning expected Good and I everyone. be out pointed that share to that outgrown not growth to you lot Thanks. said gain to the next years, follow-up industry you've response been by of a gangbusters good, a but you the Gentlemen, five and earlier your

So of exists? of I of years? right like you over can just that to potential of do share outsized industry analysis up you trend of that a wanted the in the next structure feel keep kind kind you now, your kind Do get several think sense gain

Greg Gantt

certainly I does think it Ravi.

what capacity extremely think continue it XX, our -- as we is worked years, to past We and we've to grow to hard our are you extremely and XX our service that network and increase do done center is we've -- which the strategy entire well. I know, over

we outgrow there. So are expect would growth take certainly I positioning I out think advantage would to of whatever that And our is competitors. we

seen we For have not that the most part, from them.

continue in So we'll but where take well-positioned a spot to certainly good and to goes, think that see share. I we're

Ravi Shanker

of said the like And you to that markets the share starting January going is in in when Are down. of kind quarter accelerated seeing that the have already you far? and fourth the in kind you past tend market rather so to gain turn than up

Adam Satterfield

are. Yes. We

whatever where could for numerous are of competitors response customers. We seeing respond or the seeing we advantage to able from our We've that. didn't were the and take that. our We're situations had reason

we capacity So again, so that's what be why standpoint, there we're the we're need can doing a when doing from arises.

Ravi Shanker

on among Got TFI for you going us just think can color I that non-union it. especially the of kicks all M&A of some UPS, of domino on do industry structure the forward. this industry a you a thoughts little Were a think a off you pretty And it's some deal, and players? this follow-up, transaction because big effect give more your at deal in -- or consolidation surprised by the

Adam Satterfield

regardless competitors investments. on transactions just keep who or Like executing of proven. I any plan making kind rather we just focused think think, are, I Greg and What said, competitors comment our specific our said not we'd of But I the whatnot. on earlier, we've

and that financials of the the and doing lot customers, regardless staying employees, have continue the to We and certainly service end in our our focused fall of advantage included we're well a marketplace in focused going a we advantage just thing that's growth years capacity the our have of in that and and a kind profitable on to and let staying on as keep just the do out then landscape. to expect over

Ravi Shanker

Okay. Thank you.

Operator

And next we'll go Wadewitz with to Tom UBS.

Tom Wadewitz

up in to build price certainly few on know, I focused Yes. into not topic on is it the that morning. TFI, there had making be approach but some shown there argue and and granular their ask, disciplined the being a need a this Wanted you've might lot on they're to I think they're about they you that money. market focused could Good TFI you're freights and not UPS, volume

they So thought freight have be on good if I or quality freight is it it bad right? there you function want but capacity is thought tight there to don't of you all whether you not, have a price is you if offer could freight simply long is you that when good a as a on granular, want or as know don't that don't perhaps

Adam Satterfield

a is most lot a pricing there. latter such there but of comment it, that of out the I not there freight There think appropriate. is bad bad probably as the ton probably a thing -- is is

who from just good raise be better or site on accordingly. we'll but has the appropriately bad that's hall what see. think they on to prices there execute will acquisition, done you we're our then, have what industry. price that particular see based mean handle I understand to price to going and that for expensive at freight, very to wait cost of is priced that I'm So, move it. we something than it certainly Canadian whatnot, due UPS most have the their there think, in market we'll strategy to we've I What if knows that all, And on just if the or up commodity been in this sure down is have and little and anyway TransForce to Tom, does not

So all not of be negative, good standpoint think a for it that don't is so certainly I I us. this from not see it's now,

Tom Wadewitz

surprisingly How sense. strong in on seem the of to industrial in would swing And industrial, you I June, industrial be in do side? be that step-up makes not think is impact kind of could terms back in in and you is terms or stronger I story least of potential consumer mix mix July, more operating think catches industrial swing consumer? much something That terms which a the even the meaningful there's 'XX was okay. about as fall, you that right, versus know August, think Yeah, think the in in up and freight how the that that do in a or about at helpful of there in performance freight of your consumer? ratio if more

Adam Satterfield

the is to markets, are more the and they with percentages the 'XX, with the over range. they we as to -- prior consistent exposed year, in performance the industrial came industrial to consistent quarter XX% well, were in and pretty both same customers that as and stayed industry customers pretty the One, XX we're industrial-related industrial-related and about revenues our XX% in close retail-related our same were the XX% 'XX still they about XX% revenue our was of in. to year Fourth of balance

probably we're a continuing the operating the bit industrial leading growth improvement on respect and XXXX would as in calls large and that in Greg of we talked see little ratio this economy all a more in customer area smaller to each profitability operating earlier, with And that ratio account business see to So year then create going though up we the out philosophy throughout how to there is own. measure to continuous by in each the is, or own lot national ongoing intact whether and to drive year we business opportunities for they them. try But that on customer's the and we make expect look that's then, account should retail on retail that industrial keeping to our we to and stand I ways about opportunity contribute and a retail XXXX, just the a performance want certainly side our industrial, side, a of the freight and or We stronger and improvements margins, I individual look its or at on us. mentioned to their there. think be look little each our customer manage I we'd kind and bit operating try think than customer improvement each with at seeing with it's

in ship shift the reverses categories next from one that So the smaller the the versus mix to industrial or one. national the in balance retail category

kind proved operate true that last our year to of that word each with our we to kind we're regard operating performance close think I and that in do one of out another.

operating get continue into drive we it we'd drive ratio. way, to and can either going So growth certainly 'XX, help the us improvement expected in the

Tom Wadewitz

Great, and Thank you. clear that's very helpful.

Operator

to we'll Chappell Jon Evercore ISI. go Next with

Jon Chappell

Thank you, morning. good

of the First of picture last on question as macro on one, kind well. bigger kind of drag

industrial least January to up in you the is obviously I signs number. think, that there the that's is the Is momentum is from starting the in that number part That year, of catch-up show that in or kind that pretty a tons consensus of the a catch economy indicative a of middle going pandemic really just is put last this of view economy up opinion the big to year? really to your at on hope. of the industrial depths building consumer

Greg Gantt

and you. with for be honest know an I I that. be but doubt resupply may to sure, its catch both, of about no think up effect there's

year where see do develops catch goes we'll but to the the it up. start hopefully So industrials as

be industry. I well us think as thing as for a our good that'd certainly

Jon Chappell

this generally is customer optimistic your And from Okay. ton?

Greg Gantt

For the most part, yes.

Jon Chappell

is, the spare mentioned follow-up your the you right of beginning at then capacity. about And Great. your comments

that's up. seems like to whether economy equipment kind hiring, drivers beyond Are any whether there other up, issues the on just of industrial restrict issues So may obvious catch at new or it take capacity? business, labor does any your ability or it's that certainly this you're restrictions, lined terminals

Greg Gantt

mentioned service is responding before, centers mean having the employees', of it used the in to their it our his we we adding tougher obvious. don't I platform labor drivers', I sure, and a are think success wherever needs, having are needs but be, so, -- not than are challenge, beyond are. for the comments little but to success. Adam whatever it's needs

are having success. that We

but wished there. a is I a what thing. it little respond think was faster, bit it a good I quicker, could is, bit but we So we're getting little that's it

your growth, you little the a what numbers becomes one starts your then the moderate challenges, It's if Sometimes some thing, know in if challenge growth growth changes accelerate it's really a if to mean. bit tight I greater.

is So going in great to that I a shape. we're think a accelerate environment, huge controlled tight we it. along in growth acceleration with get then perfect If challenge

So our nothing in way right where goes and it we'll now see certainly. but

are... We

Jon Chappell

Okay.

Greg Gantt

great a Expecting year.

Jon Chappell

Certainly, it thoughts Greg. than Thanks for the like most. you're seems responding quicker

Operator

Next with to Suisse. Landry we'll Allison Credit go

Allison Landry

Thanks, good morning.

if could the mix is revenue yield of QX, get like looks what give core per haul? So the so, exclude January just in And up ex-fuel And you maybe ex-fuel in weight per that of if underlying terms sense if the of us from a inclusive then of hundredweight, you the X.X number. length the Just that thinking could fuel? sense shipment growth you impacts give X.X% a trends. to of trying pricing us just about and

Greg Gantt

we'll those the fuel revenue will, really Yeah, X% did the Allison include excluding fourth on see continue quarter pressure consistent that fuel growth April, so just with the and pretty and fuel up metrics. the that until number and surcharge to about and January over think showing the that you was I rate some if is delta consistent in pretty

tailwind pressure on last think fuel start of that a second the a weight fuel from But length basis. analysis pretty is through current year in trends more that the the year weight in in think will haul will. little and of I we There increase becoming year excluding then that you the per was for fourth evaluate part of bit in way in had look way, that a shipment about April quarter, middle I third linear if per number how and the not perfect of consistently last but when is X.X% us higher kind fuel not quarters. certainly, and a until a of shipment finally the to there top-line up yield linear hold purely and is change you

forth offsetting. a for increase basis mentioned to necessarily the around with type average Customers We're points that always increase think be negative that supportive cost to the easier sort And trying our there that X.X% a been to look expect our with year that's type to target and our to for of to underlying and that to certainly like past to got long-term X.X% haul, range we've XX approach. ratio the you're I about it it's generally that consistent to XXX we and market of more approach average. that the continue the and or do renewals the a ability performance is certainly good mean think per above need in weight We've in follow so. but try a always to somewhere next XX able cost effect pure not has strategy a about revenue in whether of talking review XX be of to shipment earlier, been last the but I we our is length I consistent. over So talk And roller of our are just you around increase of shipment certainly coaster X.X% on got you've target per operating that an have that the pretty increase years, growth when consistent conversation in category year. to I appreciate and we'll customers so somewhat like about much and then I think so – just ballpark we been

Allison Landry

then and I strong know that. maybe should And even flow in so pretty share have you it this you to but be for buybacks XXXX. XXXX I dividends in you year the can you free that just the you you. thoughts generate from accelerate like cash mean, elevated on if if with thank repellent Okay, raised CapEx. able any seems Thank might

GregGantt

such allocation past, strong obviously there, want excess XXXX. in of create program when million and capital And million up we've able about we've number the on we've business, over and I our little position. to returns capital the been returning keep one certainly, been been the invested in investing is Yeah, for have $XXX CapEx, of talked think the to the generating CapEx priorities and been I buyback our capital a on we've last buybacks $XXX increasingly the to that pace it's but we in shareholders year the while stepped

opportunities tag. want out we'll the fact to most Northeast areas balance So the to and from sheet. may a some that there of of those really we on that that continue price on just also got expensive there some in to real mindful have step-up it's be and estate stepping like at some standpoint in continue be and to I've West the those look balance likely, up we Coast the of nice But certainly something hanging was cash not a continue want around significant dollars because to

dollars center rather return in So to opportunities strategic capital investment there to shareholders. the opportunities some we'll for look continue would more but to that's long-term absent will something those like service our our continue and on a spend

Allison Landry

Okay. Thank you guys.

Greg Gantt

Bye Allison.

Operator

Next we'll to Deutsche go Amit with Mehrotra Bank.

Amit Mehrotra

Thanks quick we're know here. hour coming on make it guys. I'll I up the

quick me Adam. ones from one Just

you relative gauge shipments know done strength years actual was? trying there XX number December over the to If sequentially to just versus maybe can how in December from last year-over-year, us to help up were X% the just January the they've how to trended January? from shipments what seasonality but sequential I

Adam Satterfield

our shipments these I'll for just everyone, the quarter go -- be of benefit I'll day. Sure. go fourth will And the and per through

and the X.X% January bit lower normally then November. November So was XX-year a October X.X% X.X% decrease that XX-year the than given a a think that X.X% and was X.X% increase October and October of than December January of was in performance November than January than the strength was back versus those lower given November outperformance had higher December. the X% higher numbers increase, December two December little X.X% decrease. why both that September average we prior. is and The but almost was is I a X% months as to average was down going a

year really the October it's the Year. can heavy So strong and will. -- was continuing once just kind get first shipments of been breather performance we play rest catch-up but a bit those and see and we took really in just were into of any if like a restrictions we through really continue of temporary. to a New you the And of lifted year just mix said, volumes And throughout the to lot you little starting of the very as month the to the into we of now that accelerate we're

trends volume So a lot side. good of favorable

Amit Mehrotra

into just I to little that so bit dig more. a Yeah, wanted

to in specific more industrial in truckload spillover three the just gains. a OD why like And on from is I'm basis is like factors is it share that was two -- understand trying on everybody through is clearly seasonality between to simple to the But is in as industrial to negative overall the better still growth strength there of we there's strength three year-over-year inflect that. or that seasonal clear I reasons to explain clearly to underlying not as up to than January not read-through one of from indicative year-over-year right bit is decipher and expecting you just just what share just of you're trying I gaining and But inflecting, on seasonality. position I'm So production US double a guys move to market basis I'm a could December want volumes best be understand economy economy, may little because truckload. be the a well strength or volumes? as of it attributions expects terms drive the relative those it market looks strong like trying three half are declines the January year what industrial and of lag we're this spillover is

Adam Satterfield

better improving. but in advantage about left that years points a sales played to and kind point we're see as giving we're that's is capacity other service uncertainty what and better now that of there that. going environment I earlier getting from got that's be. before, think service is that of and the one. advantage a unique and you capacity is the And But so we've a us is our play industry got there forth as this behind kind lot see out a the starting that's You and in advantage number these election we're anyone got this factors, we're our for feel and of I starting everyone, so always industrial out regulatory talked then We've and support to team, quality so of feedback well for you've in than economy we've customers have year else. to is out know

the And economy to well, reopening hopefully, just so, that's country of throughout. support to going an improving sort as continue as

company us to give respond increasingly give our are business, them customers in more with them it's seen upfront, long going a challenge in them to little selecting you and has a money capacity them service. low been some the Dominion, give and when think, should for And and customers price-sensitive that -- so, a that, trends. that I I work relationships and it's are dividends year for those take the the as being that all throughout we advantage we matter need of the now run. time had long with factors, just inventories we that all favorable too strengthen that think total think with can And have and a historically But we that, to And those share save the And cost maybe last wins, improvement, to ability uniquely demand more of positioned transportation improvements service, all are got bit for but pay market restocking, proved those pay Old we've may of flexible. customers many there run. we're

are end anyone market to XX more industry the day, but to a that have why unique we've at factors, share, capacity able multiple and it service the for of basis past goes grow advantage those and the been over there’s have a and years. in than we fact our the So factors the else two back advantage been

Amit Mehrotra

the indirect. -- just that XX.X% the would tell just in can part the imagine, the would us? us direct for costs, deconstruct just that you and quarter, but And obviously deconstruct I be the of then, OR guess, you can bonus direct if between payments And I

Adam Satterfield

It's about we've and revenue. between run, of of have of been so talked sort kind XX% cost, direct over our XX% long those the side cost overhead on XX% or about now, the to

to And down that we back number to that so, were again, quality back move performance, of, of lower able kind end the revenue that getting of range. to

continue bonuses Those heavily overhead on more for the we’ll direct to dock to more meaning, we those management drivers, something mechanics, put -- cost build labor on. the just and split, workers side. So, and kind obviously, are on but side, and of non-productive our

And the so, going majority but as there’s on be bonus it's an overhead side. well, direct the of to that therefore that element split be would of into

Amit Mehrotra

Yes.

very Okay. Thank much. you

Operator

go we'll Jordan with Goldman Next to Alliger Sachs.

Jordan Alliger

Good quickly where Hi. that, season you facilities, about you take such the sort curious, of needed so these will, in it close density to to, get is does OD the that morning. it of or situation the that one long Thanks. closer to just in of wanted, the can of type come Yes. wondering, a level. if you're margins fully I'm pretty density typically area to expansion an it margin service gets it how the the centers, that talking just

Greg Gantt

take excess part. but capacity open may don't from certainly does there fully have facility won't in We we typically in is additional the our till long one. it It utilize not need system. We the most there, day for

we all business a of absorbing the not from service those from that get-go. in but typically outset, the we're center put will necessarily lot So cost

service there climb typical in type is long to So a not center. usually our a returns normal

Jordan Alliger

me. was you. Okay, great. That from Thank it

Operator

Okay.

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

Ari Rosa

guys, Good nice a and congrats Hey. on morning, quarter.

So, I of, had, kind two questions.

return truckload some course But ask to market seeing shipment may normal just maybe half? order as of per kind shipment levels, the is about on elevated trucks, you second the what levels, kind kind this that the per and and Scott to weight be move year the and could wanted talk know toward about or if I first of earlier. numbers touched trends we more normalized of, trend Class supply, seemingly the the So your the see entering on I over for, weight X more expectation we of

Adam Satterfield

in think We're -- strong you backdrops. the that in average were a around XXXX-pound then. XXXX-pounds look like in go demand I we XXXX range the around I past. we've environments mentioned, strong at we're back been and from when at been can and was We've and Certainly,

per But lower little have our stay if find in time like demand we a don't shipment, go think stronger perspective. is spillover-type able we're of really as to think kind smaller with to are through good higher the downs. logistics capacity all we out a through third-party little seen a so flooded, freight. bit and certainly of also But to we've from you see just they're if by shipment year to with lot shipments capacity. a with And it, that weight customers I a the I book mentioned, bring naturally per will. and in then getting it will keeping maybe is progress the some business I help we're customers continuing they business of weight going environment their companies, performance think little I our we'd market weight of customers business see with can our it rest that overall growth bit and ups down. and XXXX constraints look find think will who I So have with When the are bit this range XXXX certainly, controlled XPLs you the the and our I

constrained of expect generally I So is the all capacity believe would it that we backdrop the in and numbers in industry. fact just given sort elevated the range economic still then to that just favorable stay

Ari Rosa

UPS specifically, asked thinking about just the it. stepping number But And for got but people and set. back about I focused obviously idea my them very and the Freight. with having a of it, Got know then helpful. That's TFI deal addressing competitive necessarily second not of question more

you part peers the start kind of You guys Does of to the have kind service levels terms that obviously advantage of doing what in-class and of competitive your kind in start levels. of benefited exceptional side? all they risk OD structures the can at do you're emulate provide? can think to are able a of best improve doing remain see a Do threat regardless and their kind continue of what it of tremendously or our kind are competitive from you service levels service network more you that margins if guys doing on of competitors service perhaps and as delivering to

Adam Satterfield

and do better it's service there, product all on I on think, hard than be and a pull But they've And it's and if an we into no not not awful do got but off but got it goes to things team, I so it's time, is you no lot I it's service science, I to obviously bad got to threat others. a a that team other out threat, into awfully you a mean, the improve true there over only think they've go rocket the all do other and to they've we it it it. to years, doubt. that the players think doubt. a, it, got hey, to the worked

see we'll do. how So they

Greg Gantt

think we've have and group carriers non-union workforce better got look though players the to market fact chains at add company I generally is to next be length And able that, respond to is got it can second-day more that service premium that in the within within as more that flexibility got I the flexibility and the of and win within needs. day you've to more carriers unionized their think share share. non-union advantage movement a non-union in Just we've and to there an the supply we've earlier to group that seen haul more I product as about shrink carriers. a of that as a mean, of talked continue a

that's to something run see over and non-unionized to playing that's and So been share expect unionized we'd mean the I movement out from players. long continue

Ari Rosa

answer the terrific you thank got record it. for time track have regard. And strong it, and that and clearly a you that's Got in a guys

So thanks that. for

Greg Gantt

right. All

Operator

over or And to any conclude session. management call closing today's that turn remarks. will for the I does question-and-answer additional back

Greg Gantt

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

Operator

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

now disconnect. may You