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Chairman & CEO Derek Leathers stated that the current fleet age of 2.4 years is appropriate, reflecting a patient strategy amid regulatory and tariff uncertainty, and they can operate within a +/- 0.2 year range. CFO Chris Wikoff calculated a more normalized Q2 TTS adjusted OI margin of approximately 3.9%, after adding back an estimated 40 basis point headwind from startup costs and a 70 basis point headwind from the year-over-year net impact of fuel.

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CEO Derek Leathers attributed the Dedicated success to new talent and a strategic push to diversify into new verticals beyond traditional retail. CFO Chris Wikoff stated that returning to positive EPS in Q2 is the goal, which would require significant sequential improvement. He pointed to optimism in Dedicated and Logistics revenue, coupled with an accelerated pace of cost reductions from the company's enhanced $40 million savings program, as key drivers.

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CEO Derek Leathers stated the company will remain nimble, but the strategic focus is on growing the Dedicated fleet rather than One-Way until rates improve significantly. Regarding competition, Leathers sees opportunity as demand improves, noting that some newer competitors who were aggressive on price may now be vulnerable. He also highlighted the potential to convert private fleets into Dedicated customers as they face equipment renewal decisions.

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Chairman & CEO Derek Leathers explained that while he cannot guarantee the anomalous health claims won't recur, history suggests a repeat at that magnitude is unlikely, setting up for moderate sequential improvement. Both Mr. Leathers and EVP, Treasurer & CFO Chris Wikoff advised using the end-of-period truck count for the Dedicated fleet, which was up 80 trucks sequentially, as it better reflects late-quarter new business and fleet expansions.

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CEO Jim Vena emphasized that Union Pacific makes diligent, well-researched decisions, not flippant ones. He stated that achieving a high level of operational excellence, safety, and service allows the company to explore what's possible next. He noted the decision to announce discussions was a prudent step after significant homework, but declined to comment on specifics of ongoing negotiations.

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CEO Vincenzo Vena acknowledged the uncertainty from tariffs, the economy, and interest rates but affirmed the company is standing by its 3-year guidance. He highlighted the railroad's strong operational foundation and agility. CFO Jennifer Hamann added that the team has conducted scenario planning and is prepared to adjust to different demand environments.

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EVP of Marketing and Sales Kenny Rocker acknowledged some volume pull-ahead is occurring in international intermodal. On pricing, he reiterated that it was accretive to margins in Q4 2024 and is expected to remain so in 2025, driven by the commercial team's ability to sell a strong service product and align price with the value delivered to customers.

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CEO Malcolm Wilson reported no material impact from tariffs on the sales pipeline, which is up 13% year-over-year to $2.5 billion. CFO Baris Oran confirmed that organic growth is expected to accelerate, driven by an 8% contribution from wins, offset by a 5% churn, with 1.5% from pricing and flat volume assumptions.

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CEO Malcolm Wilson explained the adjustments were a 'one-off event' where GXO proactively worked with a few large customers to optimize their networks, noting contracts are back-to-back, preventing financial damage. CFO Baris Oran clarified the 2025 free cash flow conversion target of 25-35% (midpoint 30%) is consistent with 2024's actual performance, which was impacted by approximately $70 million in transaction and integration costs for the Wincanton acquisition, some of which will continue into 2025.

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CEO Malcolm Wilson clarified that Wincanton integration and synergies are not expected to impact Q4 margins, with the integration likely delayed to Q2 2025 pending CMA review. CFO Baris Oran explained that margin expansion is driven by improved utilization of multi-tenant warehouses and internal efficiency programs. Wilson added that the growing pipeline reflects increased customer confidence, a resurgence in strategic e-fulfillment projects, and GXO's expansion into new verticals like aerospace.

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CSO Jared Weisfeld noted that a softer market could improve gross profit per load, similar to the 20% improvement seen from January to March. For the rest of the year, he highlighted that Q3 will see the full run-rate benefit of contract rate increases, but the biggest variables remain volume and gross profit per load. CFO James Harris added that synergy realization will ramp up in the back half of the year.

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CSO Jared Weisfeld detailed that gross profit per load is expected to see a modest decrease from Q4 to Q1, with January being the low point, followed by improvement through the quarter. The trajectory beyond Q1 will depend on the shape of the market recovery. CFO Jamie Harris stated that of the remaining synergies, $25-$30 million in savings will be realized in 2025, with the majority of the technology-related synergies benefiting the P&L in 2026.

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CEO Tracy Robinson stated that CN does not provide quarterly OR guidance. She noted that last year's labor issues represented a couple hundred basis points of headwind that will not be repeated. Robinson emphasized that quarterly OR will depend on volume levels and unpredictable events like weather, but the team has become adept at managing disruptions and recovering quickly.

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President and CEO Tracy Robinson confirmed the company aims to recapture the 200 basis points of margin impact from 2024's one-off challenges. She stated that margin improvement will be driven by labor stability, operational discipline, productivity efforts, and pricing above inflation, but noted the ultimate OR performance will depend on volume levels.

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President and CEO Tracy Robinson noted that a softer macro outlook is driving resource adjustments. Chief Network Operations Officer Patrick Whitehead detailed these actions, including reducing FTEs, parking locomotives, and returning leased railcars. Tracy Robinson added that the goal is to balance cost reduction with growth capacity, with more details on 2025 to come in January.

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CFO Darrell Campbell clarified that while the company expects year-over-year growth in price and margin for the remainder of the year, they do not provide quarterly guidance. CEO Mark Rourke explained that Dedicated fleet growth expectations have moderated due to some churn and new asset efficiency initiatives, such as increased slip seating, which will reduce the net tractor count while improving productivity. He confirmed that total tractor count in Dedicated is still expected to grow from Q1 levels.

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Executive Mario Harik noted that recent customer surveys indicate a more cautious tone for the second half of the year, with expectations for flattish demand, but he has not seen significant tariff-related pull-forwards. CFO Kyle Wismans explained that capital allocation prioritizes organic investment and deleveraging, with the new $750 million authorization providing flexibility to opportunistically repurchase shares with excess cash.

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CEO Mario Harik shared that recent customer surveys indicate a more cautious tone for the second half, with expectations of flattish demand, but no significant tariff-related pull-forwards have been observed yet. CFO Kyle Wismans explained that the $750 million buyback authorization provides flexibility to opportunistically return excess cash to shareholders after funding organic growth and deleveraging.

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Executive Mario Harik stated that the new sites are expected to be profit-neutral in 2024 and become accretive in 2025. He highlighted that these facilities are already driving low-to-mid-single-digit efficiency gains in their respective markets and are generating incremental margins of 40% or more, positioning the company for significant operating leverage in a recovery.

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CEO David Bozeman responded that the company's current strategy is designed to work in all market cycles and that the most important levers are the ones already being executed daily: disciplined volume and pricing decisions and a relentless focus on efficiency. He highlighted that with personnel being two-thirds of operating expenses, the company's dynamic workforce planning process allows it to actively manage costs in any environment.

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CEO David Bozeman and President of North American Surface Transportation Michael Castagnetto explained that the company is prioritizing the 'quality of volume' and maintaining pricing discipline. Castagnetto highlighted that new tools enabled them to expand gross margins even in a rising cost environment. They emphasized that their operating model provides the flexibility to pivot and capture volume when the market inflects, while maintaining discipline to drive higher lows.

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Michael Zechmeister, President of NAST, explained that workforce planning is now driven by productivity gains from technology and the operating model, rather than just market conditions. He expects to decouple headcount from volume growth but would not say they have hit a floor. CEO Dave Bozeman added that this model allows employees to focus more on high-value customer problem-solving.

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EVP & CFO Nadeem Velani confirmed the top end of volume guidance may be impacted by tariffs, bringing it closer to 5%. He projected sequential OR improvement from Q1 and expressed confidence in achieving a sub-60% OR for the full year, driven by strong volumes, favorable comps, and operational efficiencies.

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EVP and Chief Marketing Officer John Brooks detailed the mid-single-digit RTM growth forecast, attributing 2-3% to synergies and 2-3% to the base organic business, without relying on a significant macro-economic tailwind. He noted a strong start to 2025, with potential to outperform in the first half due to favorable comparisons in the bulk franchise. Key synergy drivers highlighted include international intermodal growth via Port of St. John and Lazaro, new automotive partnerships, and the new intermodal service with CSX into the U.S. Southeast.

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President and CEO Keith Creel expressed encouragement regarding Mexico's new administration, noting their vision supports freight rail and environmental goals, making CPKC part of the solution. EVP and CFO Nadeem Velani elaborated on the Q4 outlook, citing the absence of Q3's one-time headwinds like the labor disruption and a major derailment. He projected a potential sequential operating ratio improvement of 500 basis points, driven by strong operating leverage from a robust bulk outlook, particularly in grain.

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President Seth Runser attributed the decline to the soft macro environment, a higher mix of lighter shipments, and the impact of the weak housing market on heavier U-Pack household moves. He also noted some freight migration to the truckload market but emphasized that the company's strategy is focused on growing its core LTL business pipeline.

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Chief Strategy Officer Christopher Adkins acknowledged that sluggish industrial production, soft truckload demand, and fewer household moves have pressured weight per shipment. He stated that a recovery in any of these areas would be beneficial for profitability. President Seth Runser added that the company has built a scalable operation with significant operating leverage. He expects good incremental margins as volume returns, as it will build density in the network and fill existing capacity, and each opportunity is priced for the value it brings.

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President Seth Runser stated he expects freight to shift back to LTL when the truckload market normalizes. For Asset-Light profitability, he outlined a strategy independent of the cycle, including improving account profitability with new tools, shifting mix to SMB customers, cost control, and growing the profitable managed solutions business.

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CFO Brian Dykes clarified that while shifting trade flows create a near-term profit headwind, the long-term margin target for the International segment remains in the mid-to-high teens. CEO Carol Tomé noted that Q1 margins were also suppressed by investments in European weekend delivery, which will be lapped later in the year, providing a future margin tailwind.

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CFO Brian Dykes clarified that while shifting trade flows create a short-term profit headwind, the long-term expectation for international margins remains in the mid-to-high teens. CEO Carol Tomé added that Q1 margins were temporarily suppressed by investments in European weekend delivery, which will be lapped later in the year, providing a future margin tailwind.

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CEO Carol Tomé affirmed it was a fair question and committed to providing a more detailed long-term outlook later in the year. She stated definitively that UPS is growing profit dollars, not just margin, and that this growth will continue into 2026 as cost-out initiatives accelerate. CFO Brian Dykes reinforced this, highlighting the $1 billion in savings from 'Efficiency Reimagined' and the plan to expand domestic operating margin in every quarter of 2025, with that pace accelerating into 2026.

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An executive, likely CFO Brian Dykes, attributed the strong Q3 cost performance to lapping the labor contract, which normalized wage inflation, and pulling forward savings from 'Fit to Serve' and 'Network of the Future'. He guided for Q4 cost-per-piece to be up about 1%. Executive Nando Cesarone added that 45 operational closures and increased automation (now 63% of hub volume) led to an 11 million hour reduction.

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Executive Adam Miller responded that a weaker spot market is a catalyst for capacity to exit, noting that data from a large load board showed truck postings were down 28% year-over-year in March, indicating supply is leaving. Executive Brad Stewart added that the market was already behaving as if it were fairly balanced before the recent tariff uncertainty, so it wasn't starting from a point of being far out of balance, suggesting a new equilibrium could be found without massive capacity rationalization.

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Executive Andrew Hess detailed the sustainability of cost controls, citing future runway for utilization improvement, permanent overhead reductions, and refined processes for managing variable costs. Executive Adam Miller added that they believe Truckload margins can return to historical cycle norms, targeting an operating ratio in the mid-80s in a normalized market and the upper 70s in the best of times.

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Executive Adam Miller conceded the integration has been challenging in a weak market. While cost synergies are progressing well, the primary hurdle is closing the significant rate-per-mile gap on the revenue side. He stated that a stronger market environment would enable them to close this gap much more rapidly and achieve the originally projected margin expansion.

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CFO Adam Satterfield confirmed that after a drop-off in the first week of April, trends stabilized. He noted that weight per shipment is currently down slightly more than seasonally normal but hopes to see it recover. He explained that a sustained increase in weight per shipment is a key indicator of an improving economy and a precursor to building network density.

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CFO Adam Satterfield confirmed that after a drop-off in the first week of April, trends stabilized. He noted that while weight per shipment is down sequentially, he hopes for a recovery, as it is a key indicator of an improving economy and is critical for building network density and driving strong incremental margins.

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CFO Adam Satterfield confirmed a healthy pricing environment, with Q4 revenue per hundredweight excluding fuel up 3.8%, in line with expectations. He noted January's 4.5% increase was partly influenced by a lower weight per shipment but expects the full quarter to align with normal seasonality of 3.6% to 4.0% growth.

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CFO Adam Satterfield opined that a significant amount of LTL freight moved to the truckload market following the Yellow bankruptcy, partly due to lower TL rates. He believes this freight will ultimately return to the more efficient LTL network, creating a future volume opportunity for ODFL both directly and indirectly as competitors absorb that freight.

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CCO Ed Elkins attributed the merchandise pricing success to improved service, which is increasing customer trust and creating more opportunities. For intermodal, he noted pricing is flattish, and the company is taking what the market allows. CEO Mark George and CCO Ed Elkins both added that falling seaborne metallurgical coal prices are a significant headwind that masks some of the core pricing strength.

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Chief Commercial Officer Ed Elkins attributed merchandise pricing success to improving service building customer trust, while describing intermodal pricing as 'flattish.' Both Elkins and President and CEO Mark George emphasized that lower export coal pricing remains a significant headwind to overall revenue per unit performance.

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John Orr, COO, clarified the focus is on 'rightsizing the service' and eliminating waste like overtime, not simply headcount reduction, noting a hiring freeze is in effect. Mark George, CFO, confirmed the company is on track to achieve its previously guided 2% year-over-year reduction in T&E headcount by year-end, even while handling more volume.

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CFO Sean Pelkey noted that year-over-year profit growth in the second half is more achievable due to easing commodity price headwinds and easier comps from last year's hurricane impacts. EVP and CCO Kevin Boone clarified that intermodal volumes accelerated in late March and April, likely due to some tariff-related pull-forward.

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EVP and CFO Sean Pelkey reiterated the impact of the $350 million in headwinds. EVP and CCO Kevin Boone added that Merchandise pricing strategy remains consistent, leveraging service, but noted that lower met coal prices are a key difference from last year. He also mentioned encouraging signs of stabilization in Intermodal contractual rates.

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CFO Sean Pelkey responded that while it's early for 2025 guidance, the long-term setup is supportive of margin growth due to a strong service product and network capacity. However, he identified potential 2025 headwinds from lower fuel prices and network disruptions from construction, with a potential tailwind from a firmer trucking market. He stressed that the primary goal remains operating income growth.

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Darren Field, President of Intermodal, responded that the company is 'mildly pleased' with bid season, having successfully filled some empty network legs. However, he cautioned that the environment remains competitive, rate increases are not across the board, and some business was lost due to pricing discipline. Field also noted that strong growth in the Eastern network (13%) versus Transcon (4%) will impact revenue per load due to shorter lengths of haul.

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Brad Delco, an executive at J.B. Hunt, confirmed the guidance applies to the consolidated business and reflects normal seasonality, excluding the unique pandemic years. He stated the commentary was intended to align market expectations with the company's view and declined to provide a more detailed breakdown of the drivers.

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Darren Field, President of Intermodal, said Eastern conversions are small but consistent, driven by sustainability goals and excellent service levels. He noted that if network imbalances persist, the associated costs must be factored into customer economics. CEO Shelley Simpson added that improved bid compliance will help solve these imbalances over time.

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EVP and CCO Brie Carere stated that FedEx is well-positioned to capture growth and incremental profit when B2B demand returns. She anticipates sequential revenue improvement and a 'quite a good margin' in Q4. EVP and CFO John Dietrich added that focusing on service will help capture more volume, which will favorably impact density and margins.

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EVP and CFO John Dietrich explained the guidance was revised from $20-$21 to $19-$20 per share because expected volumes and revenue did not materialize amid a soft industrial economy. Dietrich noted that while Q3 will benefit from ramping DRIVE savings and a favorable Cyber Week shift, these will be more than offset by an increased headwind from the expired U.S. Postal Service contract. He affirmed that Q4 is traditionally the strongest quarter and this dynamic is expected to continue.

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EVP and CFO John Dietrich confirmed that the company sees an opportunity for sequential quarter-over-quarter profit improvement. EVP and CCO Brie Carere stated she feels confident about the surcharge capture rate, as many are pre-negotiated, and believes customers understand the need for broader surcharges this year due to the condensed peak shopping season.

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