Elliot Alper

Elliot Alper asked about the current demand environment, feedback from agents, potential project work from severe weather in the March quarter, and revenue expectations for the Navegate platform.

Answer

CEO Bohn Crain noted a generally bullish sentiment and some market improvement, despite softness in international and ocean imports. He highlighted Navegate's role in driving growth and observed a tightening capacity environment with rising tender rejection rates, which could be constructive for margins in the March quarter. Regarding project work, Crain stated nothing was on the books yet but they remain vigilant for opportunities. For Navegate, he declined to provide specific revenue figures but emphasized its compounding effect, positive customer feedback, and broad application potential.

Elliot Alper with TD Cowen inquired about the current demand environment, insights from Radiant Logistics' agents, and the potential for project work stemming from severe weather in the March quarter. He also asked about expected revenue contributions from the Navegate platform.

Answer

CEO Bohn Crain noted a generally bullish sentiment and some improvement, despite soft international and ocean imports. He highlighted the positive impact of business diversity and Navegate's traction, observing a tightening capacity and rising tender rejection rates which he expects to be constructive. Regarding severe weather, Crain stated no project work was on the books yet, though they monitor such events. For Navegate, Crain did not provide specific revenue figures but emphasized its compounding effect through customer and vendor onboarding, leading to "reverse inquiry" and broad interest across verticals.

Elliot Alper, on for Jason Seidl, asked for details on the outperformance of the base business in the March quarter, the potential impact of the 'bullwhip effect' on the upcoming June quarter, and any recent booking trends from Asia following tariff news.

Answer

Executive Bohn Crain acknowledged that while it's early, they anticipate softness in the June quarter due to trade tensions, though April's performance was better than expected. He noted that market chaos creates opportunities and expects a surge as supply chains reset. CFO Todd Macomber added that Canada's performance was stronger than anticipated and that while international shipment volumes were down, margins per file were up, with acquisitions also contributing to growth. Regarding Asia, Mr. Crain mentioned a recent slowdown in ocean imports from China but believes it will be short-lived, highlighting that their recent Transcon acquisition is heavily focused on this trade lane.

Elliot Alper of TD Cowen inquired about the key drivers for the December quarter's outperformance, specifically the impact of Hurricane Milton relief projects and any potential demand pull-forward. He also asked for the strategic rationale and financial contribution of the TCB acquisition and sought details on the company's customs brokerage operations amid changing tariffs.

Answer

Executive Bohn Crain explained that the quarter's strong results were primarily driven by humanitarian projects related to Hurricane Milton, which involved chartering 49 flights for IV fluid. He acknowledged a modest bump from tariff-related pull-forward but emphasized the market remains challenging. Crain detailed that the TCB acquisition adds crucial 40-foot intermodal capabilities and is expected to contribute $2-3 million in incremental EBITDA. He also highlighted the growing importance of their customs brokerage business, Radiant World Trade Services, and its associated technology platform as a key catalyst for future growth.

Elliot Alper of TD Cowen inquired about the key drivers behind the fourth quarter's sequential EBITDA outperformance, the outlook for the upcoming peak season, and whether Radiant was observing any freight pull-forward ahead of a potential port strike.

Answer

CFO Todd Macomber attributed the strong performance to sequential growth in volume and improving pricing. CEO Bohn Crain confirmed a pull-forward of freight due to a combination of factors including global events and potential tariff changes, which has led to capacity tightening on the West Coast. Regarding a potential port strike, Crain stated the company would not speculate but is prepared to support customers with logistics solutions if one occurs.

Elliot Alper asked about the volume and pricing assumptions embedded within Union Pacific's 2026 guidance. He specifically inquired how customers are absorbing new contracts given the muted customer demand observed, and what the overall expectations are for the year.

Answer

Jennifer Hamann, CFO, clarified that Union Pacific plans to outperform the markets on volume and that price dollars, in absolute terms, are expected to exceed inflation dollars. Kenny Rocker, EVP of Marketing, highlighted the company's ability to succeed in challenging environments, citing record freight revenue in 2025. He mentioned strong performance in industrial chemicals, plastics, and grain products, reiterating their commitment to maximizing price based on the service provided.

Elliot Alper asked about the volume and pricing assumptions embedded in Union Pacific's 2026 guidance, specifically how customers are absorbing new contracts given muted demand, and the overall expectations for the year.

Answer

Jennifer Hamann, Chief Financial Officer, clarified that Union Pacific plans to outperform markets on volume and that absolute price dollars will exceed inflation dollars, not necessarily in percentages. Kenny Rocker, Executive Vice President of Marketing, highlighted the company's ability to succeed in challenging environments, citing record freight revenue in 2025 and growth in specific commodities like plastics, industrial chemicals, and grain products. He reiterated that 'service drives price' and their pricing mindset remains consistent.

Elliot Alper of TD Cowen asked about the drivers of the positive domestic intermodal outlook for Q4 and whether this growth could partially offset the expected decline in intermodal revenue per car.

Answer

EVP Kenny Rocker noted that domestic intermodal has been positive since Q2, benefiting from international spillover and strong demand for products like the Inland Empire service. While he expects continued benefit from international trends in Q4, he did not directly quantify the offset to revenue per car, stating they will see how the quarter progresses.

Elliot Alper from TD Cowen inquired about Landstar's capacity planning over the next year in light of non-domiciled CDL regulations and discussions with insurers regarding associated risk premiums. He also asked about how load and revenue per load comparisons would stack up through Q4.

Answer

Frank Lonegro, CEO and President, stated that Landstar has no exposure to non-domiciled CDL holders due to its business model and vetting, which would be communicated to insurers. He emphasized focusing on BCO fleet growth and retaining quality third-party capacity. Jim Todd, CFO and VP, noted that October rates were flat (vs. typical 60 basis point uptick) and loads per workday were down 4.5% (vs. typical 2% drop), indicating a need for a strong lift in November and December.

Elliot Alper asked about Landstar's capacity planning over the next year in light of non-domiciled CDL regulations and whether there have been discussions with insurers regarding associated risk premiums. He also inquired about how Q4 load and revenue per load comparisons stack up, specifically if comps get tougher after October.

Answer

CEO Frank Lonegro confirmed that Landstar has no exposure to non-domiciled CDL regulations due to its business model and vetting processes, and this will be communicated to insurers. He emphasized the focus on growing the BCO fleet and maintaining high quality for third-party capacity providers. CFO Jim Todd noted that October's rates were flattish, lagging typical seasonal upticks, and loads per workday were down more than usual, indicating a need for a strong performance in November and December to meet historical Q4 trends.

Elliot Alper of TD Cowen asked for Landstar's view on the overall capacity landscape, specifically if larger fleets are shedding tractors. He also inquired about the potential timing and magnitude of hurricane rebuild efforts.

Answer

CEO Frank Lonegro stated that while there is likely capacity parked by asset-heavy and private fleets, Landstar has a better view of small operators. Executive Vice President Joseph Beacom added that brokerage volume is shifting toward slightly larger carriers, suggesting some contraction among the smallest fleets. Regarding hurricane rebuilding, management noted it's too soon to tell the timing and magnitude, but the company has a playbook and is actively engaging customers. They expect rebuilding to start sooner in Florida, while areas impacted by Helene will first require significant demolition.

Elliot Alper asked about FedEx's Network 2.0 plans during peak season, specifically if any stations would be put on hold in busier markets, and if this could affect the cadence of the $1 billion in cost savings.

Answer

President & CEO Raj Subramaniam confirmed that Network 2.0 progress is on track, with the Canada transition complete and U.S. implementation underway as planned, exiting Q1 with 18% of U.S. ADV running through the optimized model. EVP & Chief Customer Officer Brie Carere clarified that new optimizations are never planned during peak season to prioritize service, ensuring no impact on the cost savings cadence from peak operations.

Elliot Alper of TD Cowen, on behalf of Jason Seidl, asked if SMB customers were feeling more pressure from tariffs and whether increased competition for SMBs was creating pricing challenges. He also inquired about the outlook for peak season.

Answer

CFO David Saperstein stated they have not seen specific tariff pressure on SMB customers and described the competitive environment for SMBs as a normal, functioning market. Alain Bedard, President, CEO & Chairman, added that freight that is good for one carrier may not be good for another depending on network fit. Regarding peak season, he indicated the outlook is currently 'more of the same.'

Elliot Alper inquired about the key drivers of weakness within the Logistics segment during the first quarter and whether that weakness is expected to persist.

Answer

Executive Alain Bedard stated that the revenue decline in Logistics was driven almost entirely by the truck moving business, as major OEM customers reduced production by 20-30%. He expects this weakness to persist through Q2 and Q3 but sees improvement in Q4 2025. He also noted that OEMs are forecasting a "boom year" in 2026 due to upcoming changes in environmental requirements for truck manufacturing.

Elliot Alper of TD Cowen inquired about the quantifiable impact of start-up costs on Dedicated segment margins and the outlook for a modest peak season. He also asked for more detail on what the company considers "value-added services" in its dedicated strategy.

Answer

President Paul Bunn projected slight sequential margin improvement for Dedicated in Q3, followed by seasonal pressure in Q4, while noting Expedited could see a lift from peak season. Both Bunn and CFO Tripp Grant explained that "value-added services" involve shifting away from commoditized dry van freight towards more specialized, difficult-to-handle niches like live haul or high-service requirement freight to differentiate and protect margins.

Elliot Alper inquired about the LTL pricing environment, noting that the sequential increase in contract renewal rates to 4.9% seems to contrast with a weaker macroeconomic backdrop.

Answer

Executive Eduardo F. Conrado responded that the pricing market remains rational, with no major competitors chasing growth at the expense of price. He attributed the strong renewal rates to customers recognizing and appreciating the value ArcBest provides, leading to productive conversations.

Elliot Alper of TD Cowen asked for the key assumptions underpinning the high and low ends of the 2025 earnings guidance. He also questioned the potential for Q1 earnings growth and requested more detail on the outlook for the Dedicated segment, including tractor count and pricing.

Answer

CFO Kevin Beth stated the high end of guidance assumes a tightening truckload market, additional Intermodal pricing power, and higher peak season surcharges. The low end considers potential impacts from tariffs or a weaker consumer. Executive Phillip Yeager noted that Q1 earnings growth would require a ramp in demand post-Lunar New Year. Regarding Dedicated, CFO Kevin Beth highlighted a 13% increase in revenue per tractor per day and a strong pipeline, with pricing locked into long-term contracts, leading to an expectation of flat revenue for the year as new wins offset customer losses.

Elliot Alper, on behalf of Jason Seidl at TD Cowen, asked for more details on initiatives in purchased services as a margin lever and the expected cadence of this expense for the rest of the year.

Answer

Mark George, CFO, stated that purchased services is a major focus for cost reduction, particularly in non-volume-related areas like technology, and he expects the expense to be down year-over-year in the second half. John Orr, COO, provided an example of streamlining fuel distribution to reduce reliance on third-party services.