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CEO Drew Wilkerson confirmed the 17% Last Mile stop growth was 100% organic, driven by customer consolidation, cross-selling from the Coyote acquisition, and new wins. CSO Jared Weisfeld explained the Q3 EBITDA bridge, citing persistent automotive headwinds (a >$10M gross profit headwind in Q2) as the primary offset to the positive impacts from synergies and improved profitability.

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CSO Jared Weisfeld identified gross profit per load, driven by the cost of purchase transportation, as the primary variable for the Q1 EBITDA range. CFO Jamie Harris explained the company's cash flow profile, noting a strong 75% EBITDA-to-FCF conversion rate above the breakeven point. He confirmed transaction costs are cash expenses but represent a good ROI, and he reiterated confidence in the long-term 40-60% free cash flow conversion target through a cycle.

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CFO Kyle Wismans attributed the expected yield growth to strong contract renewals, which are expected to be even stronger in Q3, and the compounding effect of initiatives like growing accessorial revenue and expanding the local customer channel. He noted the strong flow-through from yield to revenue per shipment as proof of retention. He reiterated that Q3 year-over-year yield ex-fuel growth is expected to be at or above Q2 levels, driven by these self-help measures.

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Executive Mario Harik highlighted the dramatic reduction in the damage claims ratio to 0.2% from 1.2% historically, with a future goal of 0.1%. He explained that future service gains will come from creating more direct-to-destination trailers to reduce rehandling and continuing to improve on-time performance, which is already at a record high.

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Matthew Cox, Chairman, Director & CEO, outlined the Southeast Asia strategy, which is customer-driven and focuses on partnering with feeder services to establish the fastest and most reliable transit times from new origins, including leveraging land transport from nearby countries. Joel Wine, EVP & CFO, confirmed that G&A cost-saving measures initiated in Q2 are expected to persist for the rest of the year, contributing to margin performance. He also reiterated that the Q3 outlook already incorporates expectations for a more muted peak season with lower freight rates and volumes in the China market.

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Matthew Cox, Chairman and CEO, explained that Vietnam currently originates about 20% of Matson's volume, with significant capacity to scale up through feeder partners. He noted that the initial volume decline post-tariffs was seen across all origins, but Vietnam volumes have since recovered to prior levels, partly due to the new Ho Chi Minh service. Cox also highlighted that Vietnam itself faces infrastructure constraints that could limit rapid, large-scale production shifts.

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Chairman and CEO Matthew Cox explained that the Q4 rate moderation follows traditional seasonality, though rates will remain significantly higher than the prior year, influenced by factors like the ILA contract and e-commerce trends. EVP and CFO Joel M. Wine confirmed that all six MAX service charters have been extended into 2026-2027, resulting in an estimated $8 million reduction in charter costs for 2025 compared to 2024.

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EVP & CMO John Brooks explained that lower fuel prices and the removal of the carbon tax effectively wiped out all pricing gains in the quarter, while negative mix from strong bulk and intermodal growth was a 4% headwind. He expects the fuel headwind to improve but the carbon tax headwind to persist. Mix will likely remain a headwind in the second half due to an expected strong performance in bulk commodities like grain, potash, and coal.

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EVP and CMO John Brooks confirmed they are ahead of schedule, ending 2024 with an over $800 million synergy run rate and targeting another $300 million in 2025. He described the progress as being in the 'early to mid-innings,' with significant future opportunities in automotive (OEMs and parts), the MMX intermodal service, and a largely untapped refrigerated business linked to new Americold facilities. This suggests a long runway for synergy growth well into the future.

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EVP & CFO Adam Satterfield stated they compete on every account and their value goes beyond basic service to solving customer problems. President & CEO Kevin Freeman added a key differentiator, especially in retail and grocery, is their ability to prevent costly 'on-time, in-full' fines for customers, a capability competitors have not been able to replicate.

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EVP & CFO Adam Satterfield noted that ODFL has always competed on all accounts and its value extends beyond basic service metrics. President & CEO Kevin Freeman added a key differentiator, especially in retail, is ODFL's proven ability to help customers avoid costly fines for not having products on the shelf on time and in full, a capability he believes competitors have not matched.

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CEO Kevin Freeman explained that market share fluctuations are largely due to a modal shift, with LTL freight moving to truckload carriers offering stop-off charges in a soft market. He expects this freight to return to LTL when truckload capacity tightens. CFO Adam Satterfield added that the overall LTL industry volume is still down significantly from its 2021 peak.

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CEO Kevin Freeman explained that perceived market share fluctuations are likely due to a temporary modal shift, with some LTL freight moving to truckload carriers in the weak environment. He expects this freight to return to LTL when truckload capacity tightens. CFO Adam Satterfield added that winning share requires both service and value, which remains ODFL's focus.

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CFO Adam Satterfield noted that ODFL's industrial-related business outperformed its retail segment in Q4, aligning with positive customer sentiment and the rising ISM. He mentioned there is typically a couple-month lag for such economic indicators to translate into accelerated shipment volumes for the industry.

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CFO Adam Satterfield expressed satisfaction with Q3 yield performance, attributing it to superior service validated by the recent Mastio award. He anticipates Q4 revenue per hundredweight (excluding fuel) to increase by 3.8% to 4.2% based on normal seasonality, stating ODFL will maintain its disciplined, long-term pricing approach.

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Chief Commercial Officer Eddie Sorg clarified that the timing aligns with their typical 10-11 month GRI cycle. He stated the increase is justified by the value provided to customers and rising costs. Sorg noted that the portion of business subject to the GRI is smaller than in past years, so the overall impact, while needed, will not be 'overly great'.

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Chief Financial Officer Matt Beasley explained that while no specific revenue outlook was provided, the guidance assumes typical seasonal increases in daily revenue. He confirmed a continued focus on a portfolio of ongoing cost initiatives, such as compliance campaigns and workforce alignment, rather than new, specific cuts.

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CFO Matt Beasley acknowledged an impact in Q4 from adjusting various incentive plans based on performance but did not provide a specific number. He noted that encouraging trends on non-weather-impacted days in January give them hope for sequential revenue improvement. For 2025, he stated the company will follow its typical quarterly process of truing up all incentive plans based on performance and expectations.

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An executive, Christopher Adkins, attributed the lower weight per shipment to freight shifting to the low-priced truckload market and weakness in the heavier household goods moving business. CFO Matt Beasley added that September's weight per shipment was simply weaker than anticipated due to the macro backdrop.

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CEO Frank Lonegro and VP Jim Applegate detailed a mixed end-market outlook, with continued strength in data centers and infrastructure offsetting weakness in automotive and housing. CFO Jim Todd explained that while softer rates could widen brokerage spreads, a potential headwind to VCM could be lower BCO utilization, leading to a relatively flat sequential expectation.

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CEO Frank Lonegro noted that automotive and cross-border freight were drags in Q1 but highlighted strength in heavy haul. Executive James Todd specified that April volumes were slightly below normal seasonality. For Q2 expenses, management guided that the $4.8M fraud charge will not repeat, a $2-3M convention cost will be added, and incentive compensation should be similar to Q1, while expecting Q2 revenue to be above Q1 but below the prior year.

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CEO Frank Lonegro attributed automotive weakness to lower demand for expedited services and consumer hesitancy due to high interest rates. CFO James Todd detailed potential cost offsets for 2025, including lower contractor bad debt if the market improves, reduced trailer maintenance from a refreshed fleet, and moderating depreciation pressure from IT projects, though this will be partially offset by higher depreciation on new trailers. He also noted headcount has been reduced through attrition.

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CFO David Saperstein explained that the yield decline was primarily driven by a mix shift towards heavier freight, as weight per shipment increased by over 5%. Alain Bedard, President, CEO & Chairman, added that any potential Canadian postal strike had a minimal, insignificant impact on the P&C segment's results.

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Executive Alain Bedard explained the claims ratio was partly skewed by the closure of a salvage store but that the team is focused on fixing the root cause. He noted service is improving, with on-time delivery up to the 95-96% range and missed pickups down 50%. Bedard conceded that the systemic issues at the former UPS Freight were far worse than anticipated, particularly regarding outdated technology for LTL. He stressed the key difference versus Canada is network density, which has been impossible to build organically and will require M&A.

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CEO Alain Bedard emphasized that fixing service is the top priority, as poor service leads to high customer churn, negating any pricing advantages. Regarding M&A, he confirmed that reducing debt to below a 2.0x leverage ratio is the immediate focus. However, he noted the weak freight market creates good M&A opportunities, and TFI will remain patient while still planning for typical tuck-in acquisitions in 2025.

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Chairman & CEO Robert Sanchez responded that sales decision delays in lease and dedicated did not improve in Q2, though they did see improvement in the SCS segment. He clarified that the back-half guidance is driven more by a favorable sales mix (less wholesaling) with only a slight improvement in market pricing assumed, primarily in Q4.

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CEO Robert Sanchez explained the revenue-per-truck change was due to seasonal slowdowns and the specific mix of their customized dedicated customer base. Steve Sensing, President of DTS, added that operating revenue, which normalizes for fuel, performed as expected. Sanchez identified the primary driver for margin recovery in 2025 as the successful integration of the Cardinal Logistics acquisition, which is expected to return DTS EBT margins to the high single-digit target.

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CEO Robert Sanchez projected that gains on sale would likely hover around the recent quarterly range of $15M-$20M as pricing appears to be finding a bottom. CFO John Diez addressed the cash flow question, explaining that while proceeds from used vehicle sales were softer, the impact was within the existing $100 million guidance range. Therefore, an adjustment was not deemed necessary, particularly as market conditions are 'bouncing along the bottom.'

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President Paul Bunn attributed the dedicated fleet growth to a small acquisition and expansion in the poultry business, with the avian flu impact having subsided. CFO Tripp Grant explained that the revenue per mile metric was distorted by a mix shift towards lower-mileage dedicated trucks and away from expedited units. Grant also noted a recent pickup in interesting M&A opportunities, though the company remains disciplined.

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CEO David Parker described the LTL market as mixed, with national carriers facing more stress than regional ones and a notable lack of seasonal demand pickup. President Paul Bunn reported that the AAT government business had a strong Q1 and continues to perform well. Regarding capital allocation, executive James Grant and Bunn stated that the new share repurchase program does not preclude a strategic M&A deal, emphasizing a disciplined approach. Grant clarified that 2025 CapEx is lower because 2024 included significant growth spending for the poultry business, making 2025 a more normalized, maintenance-level year.

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CEO David Parker expressed significant optimism, stating it's the best he has felt about the market in 2.5 years. He noted that Covenant has already secured 2.5% rate increases on over half its business and has won more bids in early 2025 than in the first six months of 2024. For the Dedicated segment, Parker explained that customer fleet rightsizing is largely complete and detailed the temporary nature of disruptions from Avian Influenza, expecting a recovery by March.

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Executive M. Bunn stated that they are actively rebalancing the Expedited network to improve utilization and expect fleet counts to remain stable. He projected the Dedicated segment's Q4 performance to be similar to Q3, with strong poultry business offset by other rate adjustments. Regarding M&A, both M. Bunn and CEO David Parker emphasized a patient and disciplined approach, seeking niche, high-margin businesses that fit their culture, while building cash reserves.

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EVP of Operations Eric Gehringer confirmed that there is momentum and that engagements with the FRA have been effective and prompt. He noted that discussions are broad, covering not just crew size but also other technologies that can improve safety. He expressed satisfaction with the progress and the speed of conversations, which aim to benefit the entire industry with a safer railroad.

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EVP Kenny Rocker expressed encouragement from bid season wins and over-the-road conversions, stating that an improving truck market would positively impact revenue per car. CFO Jennifer Hamann added that a mix shift from lower-revenue international to domestic intermodal could also be a positive factor for the segment's average revenue per car.

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CFO Jennifer Hamann stated that while the company does not provide volume guidance, the negative mix impact from strong international intermodal growth will likely continue in the first half of 2025 and ease in the second half. EVP of Marketing and Sales Kenny Rocker added that the overarching goal is for volume to outpace the market and for revenue to outpace volume.

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EVP Kenny Rocker stated that the primary competition is with trucking, not other railroads, and the focus is on providing a service product that wins share. He confirmed the commercial team is securing strong pricing on merchandise freight by aligning price with the value of their service product. Executive Vincenzo Vena added that an efficient industry benefits all, as much of their traffic is interchanged.

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CEO Adam Miller reiterated the company's truckload operating ratio targets: mid-80s for mid-cycle, low-80s to high-70s at peak, and upper-80s in challenging markets. He emphasized the current focus on cost controls to create leverage for the eventual market turn. CFO Andrew Hess added that with fewer carriers participating in one-way service, Knight-Swift's scale across its brands positions it for outsized gains when service becomes a higher priority for shippers.

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Executive Andrew Hess affirmed the cost-per-mile improvements are sustainable, attributing two-thirds to operational gains in fuel, maintenance, and safety, and the rest to significant reductions in fixed overhead costs like facilities, G&A, and vendor negotiations. He stated the company has different playbooks to adjust costs further depending on market direction. Executive Adam Miller added that improved safety performance and claims management present further opportunities for cost reduction.

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Adam Miller, an executive, stated they are striking a balance by using 3PL volume to initiate flow in new terminals and then building density with higher-yield national bid business. He affirmed their commitment to pricing discipline, targeting mid-single-digit increases on renewals. Miller also noted strong customer interest in their newly expanded network coverage, with new volume commitments expected to be implemented in late Q1 and Q2.

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Executive Adam Miller stated the goal for 2025 is to convert rate improvements directly into margin gains by holding cost per mile flat or better, aided by improved utilization. Executive Andrew Hess noted that cost inflation is normalizing and that efforts to reduce fixed costs are beginning to yield benefits, citing a 250 basis point sequential OR improvement in legacy businesses.

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Brad Hicks, President of Dedicated, clarified that startup costs for new fleets added late in the year can create a drag on profitability for that period. He stated the delayed fleet loss did not materially impact Q2's operating ratio. SVP of Finance Brad Delco added that the timing difference was only a matter of a few days.

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Darren Field, President of Intermodal, stated that the benefits of filling empty lanes would become more visible later in the year. Spencer Frazier, EVP of Sales and Marketing, added that customers are resilient and focused on long-term efficiency, with mode conversion to intermodal being a key opportunity. CEO Shelley Simpson outlined a three-pronged approach to the uncertain environment, focusing on cost management, stock buybacks, and prudent capital spending, emphasizing the executive team's experience in navigating cycles.

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Nicholas Hobbs, COO and President of Highway Services, attributed strong Q4 margins partly to project work. He outlined a strategy focused on higher-service, complex freight for small to mid-sized customers. With the BNSF Logistics integration complete, he expressed confidence in the ability to scale the business and leverage investments in people and technology.

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Darren Field, President of Intermodal, attributed the margin performance to volume leverage and mix, while emphasizing that pricing remains the most significant lever. He stated the bid season strategy is to communicate their value and cost challenges to customers. Spencer Frazier, EVP of Sales and Marketing, added that these are transparent conversations about the cost to serve.

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EVP & CFO John Dietrich explained that the $1 billion in savings from DRIVE and Network 2.0 is expected to ramp up throughout the fiscal year. He clarified that a material financial impact from Network 2.0 is not anticipated until late fiscal 2027 and confirmed that the Q4 DRIVE savings met their target, contributing to the two-year $4 billion goal.

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EVP & CFO John Dietrich explained that the $1 billion in savings from DRIVE and Network 2.0 is expected to ramp up throughout the fiscal year. He clarified that a material financial impact from Network 2.0 is not anticipated until the end of fiscal 2027 and confirmed that the company achieved its fiscal 2025 DRIVE savings targets.

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EVP and CCO Brie Carere stated the pricing environment has been rational and has improved throughout the fiscal year, with strong capture on demand surcharges and the recent GRI. She clarified that the volume mix shift is due to deferred services growing faster than priority, not a 'trade-down,' and that the company is successfully capturing this growth profitably.

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EVP and CFO John Dietrich stated that there are no anticipated changes to the capital allocation strategy, which remains focused on optimizing the business and returning cash to shareholders. He confirmed the plan to complete the remaining $500 million in share repurchases for the fiscal year. Dietrich noted that specifics regarding the post-separation capital structure will be determined and communicated in the coming months.

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EVP and CFO John Dietrich confirmed that Freight is a key part of the capital investment plan, focused on high-return opportunities, and that declining fleet spend frees up capital for other areas. EVP and CCO Brie Carere added that growth at Freight is not being constrained by capital allocation and that the company remains committed to profitably growing the portfolio and expanding where it makes sense.

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CCO Remi Lalonde confirmed they are actively pursuing opportunities, such as NGLs and agricultural products, to Mexico. Derek Taylor, Chief Field Operations Officer, described the service as a "seamless interchange" in Chicago with partners UP and FXE for the Falcon service, and with NS for the Lynx service. He also highlighted the new, unique Crowley container service from Gulfport as a competitive differentiator.

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CCO Remi Lalonde identified petroleum, chemicals, and grain as areas of strength, with headwinds in forest products and metals. CEO Tracy Robinson added that while international intermodal has a lower revenue per RTM, it is a profitable business that effectively leverages the network and is a core part of their growth strategy.

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Chief Network Operations Officer Patrick Whitehead clarified that the key driver will be the recovery of international intermodal volumes, particularly the U.S. mix. He also pointed to continued strength in grain and a recovery in domestic intermodal as sufficient to carry them to the low end of the guided range, despite other headwinds.

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EVP & Group President Jim Filter described core renewal pricing in Intermodal as 'flattish,' though revenue per order has improved for three consecutive quarters. CEO Mark Rourke noted truck pricing was up low to mid-single digits. To restore long-term margins, Mark Rourke cited a combination of factors including improved pricing, better truck alternatives, and asset efficiency, stating they can grow order volume 20-25% without new boxes. Jim Filter added that optimizing their own dray capacity would also be a big part of margin recovery.

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CEO Mark Rourke explained that network growth is expected to resume in Q2 2025, driven by variable cost capacity like owner-operators and power-only. For the Dedicated segment, he anticipates growth from new business startups and, significantly, from increased revenue per truck per week by improving asset utilization, particularly from recently acquired companies like Cowan.

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EVP Jim Filter stated it was too early for 2025 pricing guidance but confirmed their disciplined approach is yielding slight sequential price improvements. CFO Darrell Campbell affirmed the $330 million net CapEx guidance, attributing it to improved asset productivity and disciplined allocation. CEO Mark Rourke added that future growth can be achieved with less capital reinvestment in trailers, potentially boosting margins.

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W. Rush, Chairman, CEO, and President, described the current environment as "hand to mouth" due to significant uncertainty around tariffs and emissions regulations. He noted that while some customers have halted orders for the second half of the year, the company expects a slight sequential increase in Class 8 deliveries in Q2. For the aftermarket segment, Rush clarified the expected Q2 improvement is sequential, not year-over-year. He attributed Q1 softness to weather in January and February, followed by a pickup in March, and noted that lower miles driven by over-the-road customers remains a headwind.

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Executive W. Rush stated that the vocational market is expected to remain strong, though without the large backlogs of previous years. He anticipates the medium-duty market will be flat year-over-year after catching up on pent-up demand. Regarding capital, Rush confirmed M&A is the top priority, followed by shareholder returns through consistent dividend growth and an active share repurchase program.

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Executive W. Rush stated that the company is actively managing its inventory, which is in better shape than earlier in the year. He highlighted the used truck department's success in reducing inventory and increasing turns, contributing positively to earnings. On costs, Rush explained that G&A expenses were proactively cut in response to flattening aftermarket profits, and he believes this cost discipline is sustainable. Regarding labor, he acknowledged that hiring and retaining entry-level technicians remains a significant challenge due to high industry turnover, but the company has a multipronged strategy to improve performance in the coming year.

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W. Rush, an executive, explained that the second-half Class 8 pipeline is similar to Q1 levels, with the freight market stabilizing but a significant recovery unlikely until 2025. He attributed the parts and service softness to struggling small customers, noting that the company's diversified customer base, including public sector and vocational, prevented a more severe decline. For capital allocation, Rush stated that M&A to expand the company's footprint remains the top priority, followed by a balanced approach to shareholder returns through dividends and buybacks.

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CEO David W. Grzebinski stated that inland utilization exited Q1 in the mid-90% range, with spot prices up low-single digits sequentially and term contracts renewing up mid-single digits year-over-year. President and COO Christian O'Neil highlighted strong underlying fundamentals, including tight shipyard capacity and high newbuild costs. Regarding margins, David Grzebinski reaffirmed the full-year guidance for a 200-300 basis point improvement, citing the typical seasonal cadence where Q2 and Q3 are strongest.

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CEO David W. Grzebinski and COO Christian O'Neil responded. Grzebinski highlighted strong supply-demand fundamentals, with rising new barge costs ($4.5 million) limiting new supply. He projected 200-300 basis points of inland margin improvement for 2025 and stated he would be disappointed if margins did not surpass the previous cycle's peak of ~27.5%. O'Neil added that Q4 term renewals are progressing well, with benefits to be realized in 2025, and noted a slight uptick in the chemical business offsetting some refinery maintenance seasonality.

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CEO Derek Leathers confirmed fleet growth is focused on Dedicated and that CapEx plans remain fluid due to tariff uncertainty. Regarding the EDGE TMS platform, he explained that current spending is elevated, with significant productivity gains expected in late Q3 and Q4. CFO Chris Wikoff quantified the Q1 IT spend headwind at approximately $0.05 to EPS. Leathers opined that bank leniency, rather than technology, has been the primary factor keeping smaller carriers in the market.

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Chairman & CEO Derek Leathers clarified that while not bullish on the entire quarter, he expects an incremental price and volume lift during peak season based on direct customer conversations. EVP, Treasurer & CFO Chris Wikoff explained that while it's too early for 2025 CapEx guidance, the company has the optionality to invest in growth. He added that share repurchases remain an opportunistic tool, balanced against other capital priorities like M&A.

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CFO John Olin declined to quantify the tariff impact due to ongoing volatility but stated Wabtec is working to minimize it and has adjusted prices accordingly. Regarding cash flow, Olin explained the year-over-year decrease was due to a $230 million securitization balance in the prior year versus zero in the current quarter. He noted that going forward, all securitization changes will be recognized in the financing section of the cash flow statement, not operating cash.

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CFO John Mastalerz stated the Q4 revenue slowdown was due to the planned production cadence of locomotives and mods, not slowing business momentum, pointing to 19.7% order growth for the year as proof. CEO Rafael Santana explained that value pricing is tied to customer ROI, like fuel efficiency, not just price hikes. He added that the company's productivity and cost-out initiatives enable it to consistently stay ahead of inflation.

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CEO Rafael Santana attributed international momentum to customer success with Wabtec's fleet, technology investments, and digital expansion. Regarding M&A, Santana noted the pipeline is the strongest it has been, with a focus on returns. CFO John Olin added that strong cash flow enables opportunistic share repurchases in the absence of suitable M&A deals.

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CFO Sean Pelkey stated that headcount is expected to remain flat, as the current crew base is needed to improve network fluidity and can handle more volume as efficiency recovers. Regarding compensation, he noted a 4% wage increase will take effect in the second half, but Q2 comp-per-employee should decline from Q1 due to less weather-related overtime.

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EVP and CCO Kevin Boone acknowledged a slow start to the year, partly due to weather, but expects volumes to improve from current levels. He described the outlook as 'more of the same,' with no strong optimism or pessimism. CEO Joe Hinrichs added that while 2025 sales are estimated in the low $16 million range, there is significant long-term potential as sales were previously over $17 million pre-pandemic.

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CCO Kevin Boone reported that CSX is successfully converting truck volume within its merchandise franchise at a higher rate than in recent years, with momentum across various areas like forest products. He noted that a tighter trucking market would accelerate this trend. On pricing, he emphasized that the focus is on delivering value through superior service, which allows customers to recognize value beyond just the price.

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Executive Phillip Yeager explained that while backhaul lanes remain competitive, there are pricing opportunities in head-haul lanes and for operationally inefficient business. He noted the company is not seeing irrational behavior. For Logistics, CFO Kevin Beth attributed the Q4 softness primarily to brokerage and some weakness in managed transportation. Yeager identified the completion of the warehouse network alignment and a rebound in demand for managed transportation and consolidation as key tailwinds for Q1 margin improvement.

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CFO Kevin Beth confirmed the Q4 ITS volume guidance of low-double-digit growth, attributing the revision to a pull-forward of demand into Q3. Consequently, the expected Q4 margin step-up that occurred in Q3 will not be repeated; margins are expected to decline slightly in Q4 due to normal seasonality. Executive Phillip Yeager added that the EASO joint venture provides potential upside to the volume guidance, which was not included in the forecast.

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Management explained the bearish outlook is driven by continued pressure on international coal prices and high domestic utility stockpiles resulting from low natural gas prices. CMO Ed Elkins confirmed that volumes from the new customer contract are expected to begin coming online in the second quarter of 2025.

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Alan Shaw, CEO, pointed to leveraging improved service and rail's inherent cost advantage. Ed Elkins, CMO, stressed that the merchandise share erosion occurred over an extended period and winning it back requires consistently demonstrating the new, higher level of service reliability, which is the primary focus.

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CEO Dave Bozeman clarified that the Q3 increase in personnel costs was driven by higher variable compensation tied to improved financial performance, not a structural change in compensation per employee. He reiterated that the strategy to decouple headcount from volume growth remains firmly in place.

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CFO Brian Dykes described the pricing environment as competitive but rational. He emphasized that UPS differentiates and wins on service and capabilities, such as RFID technology, rather than just price. He pointed to recent commercial wins and strong growth in the SMB Commercial segment (up 3.8%) as evidence of this strategy's success.

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