Jordan Alliger

Jordan Alliger asked about potential signposts for improved health in the broader demand environment for the year, such as inventory stabilization or increased freight movement, beyond ArcBest's specific initiatives.

Answer

Seth Runser, President and CEO of ArcBest, noted that customers remain focused on cost reduction and operational efficiency, taking proactive steps like inventory repositioning. He identified bright spots in discretionary retail, food and beverage, recreational equipment in LTL, SMB growth in Truckload, Expedite life science, and IT/data centers. Seth reiterated that ArcBest's 2026 Investor Day targets did not anticipate a significant macro recovery, emphasizing the company's integrated logistics approach. Eddie Sorg, Chief Commercial Officer, added that the success of Managed Solutions provides confidence in navigating market conditions.

Jordan Alliger inquired about potential signposts for an improved demand environment in the manufacturing economy, inventory stability, and broader health in freight movement as the year progresses, beyond ArcBest's specific initiatives.

Answer

President and CEO Seth Runser noted that customers remain focused on cost reduction and operational efficiency, with some bright spots in discretionary retail, food and beverage, recreational equipment, SMB growth in truckload, expedite life science, and information technology/data centers. He reiterated that 2026 Investor Day targets did not anticipate a strong macro recovery, but ArcBest's integrated logistics approach allows it to navigate uncertainties and grow its core business and Managed Solutions. Chief Commercial Officer Eddie Sorg added that Managed Solutions' success provides confidence in navigating market conditions.

Jordan Alliger of Goldman Sachs inquired about the potential for an acceleration in year-over-year trends for revenue and tonnage in August and September, given easier prior-year comparisons, and whether an inflection in revenue per day was possible.

Answer

Chief Financial Officer Matt Beasley responded that the sequential shipment growth from Q1 to Q2 already outpaced historical trends. He indicated that due to the success of ongoing commercial initiatives, there is potential for shipment per day performance in Q3 to again outperform historical seasonality.

Jordan Alliger asked about the revenue per day trend for the remainder of Q2 and whether customers, particularly in manufacturing, have indicated changes in behavior due to tariff uncertainty.

Answer

Executive Eduardo F. Conrado described customer reactions to tariffs as a 'mixed bag,' with some in a 'wait-and-see' mode while others are actively adjusting supply chains. Chairman and CEO Judy McReynolds added that ArcBest partners closely with customers to navigate such disruptions, offering a wide range of solutions to support them.

Jordan Alliger asked about the outlook for yields, specifically revenue per hundredweight, and whether it can remain positive throughout the year despite challenging comparisons.

Answer

Chief Strategy Officer Christopher Adkins stated that keeping yields positive is the goal. He emphasized that revenue per hundredweight is only a proxy for price and that the company manages for profitable outcomes, not a specific yield metric. He noted that factors like weight per shipment and length of haul also influence the final result, and the focus remains on ensuring new business is profitable.

Jordan Alliger of Goldman Sachs inquired about the drivers behind the forecast for moderating revenue per day declines in Q4, asking whether the improvement would stem from volume or yield.

Answer

CFO Matt Beasley explained that the expected improvement is primarily due to easing year-over-year comparisons for both volume and pricing as the quarter progresses. He noted that October 2023's results were unusually strong due to a competitor's cyberattack, and these difficult comps in October will lessen in November and December.

Jordan Alliger asked about customer sentiment regarding inventory levels, considering past market dynamics like tariffs and pull-forwards. He also inquired if there's optimism for a restock event driven by various stimulatory effects.

Answer

Jim Filter, EVP and Group President of Transportation and Logistics, explained that customers reduced inventory in November and early December, leading to restocking efforts in late December that extended into January due to capacity constraints and weather. He anticipates potential for continued carryover and a disproportionately negative impact on transactional customers. He also cited positive catalysts such as capital investments from the 'Big Beautiful Bill Act,' strong tax refunds, and interest rate cuts, but emphasized the need for demand catalysts to fully materialize. Mark Rourke, President and CEO, added that the Logistics Managers' Index showed a sharp decline in inventories in December, consistent with their experience, suggesting a potential for a more intense replenishment cycle.

Jordan Alliger of Goldman Sachs asked for insights into customer inventory levels and sentiment, particularly regarding a potential restock event for freight, given the observed inventory drawdown in late 2025 and various stimulatory effects.

Answer

Jim Filter, EVP and Group President of Transportation and Logistics, confirmed that customers were working down inventory through November and early December, leading to some restocking attempts and scrambling for capacity in the last two weeks of December, which pushed some freight into January. He noted that this carryover, exacerbated by severe weather, is likely to continue for a few more weeks. Mark Rourke, President and CEO, referenced the precipitous drop in the Logistics Managers' Index for inventories in December, aligning with their experience and suggesting a potential for a more intense replenishment cycle.

On behalf of Jordan Alliger, an analyst asked if the Truckload operating ratio could hold sequentially in Q1, given the elevated Q4 level and historical seasonal deterioration.

Answer

CEO Mark Rourke reiterated that the company does not provide quarterly guidance but noted that while some Q4 project work won't repeat, other improvement opportunities exist. CFO Darrell Campbell added that the Q4 operating ratio was negatively impacted by the one-time claims reserve refinement, which is not expected to recur in Q1.

Jordan Alliger questioned the underlying factors supporting the projected mid-single-digit package growth in the second half of 2026, including inventory levels, consumer demand, and macro trends. He also asked about the confidence in the revised network and headcount to manage this growth.

Answer

Carol Tomé (CEO, UPS) cited a stabilizing U.S. small package market (low-single-digit growth excluding Amazon), supportive fiscal/monetary policy, and an improved manufacturing outlook. She also noted easier year-over-year comparisons due to exiting Amazon and Chinese e-commerce volume. Brian Dykes (EVP and CFO, UPS) highlighted wins in healthcare, automotive, and air products, with a mix shift towards heavier weights, longer zones, and higher SMB/B2B penetration. Carol Tomé further detailed RFID capabilities (Smart Facility, Smart Car, Smart Fulfillment) driving productivity and new commercial business, with the Digital Access Program (DAP) revenue reaching $4.1 billion in 2025.

Jordan Alliger inquired about the underlying factors supporting the mid-single-digit package growth expected in the second half of 2026, including inventory levels, consumer demand, and confidence in the revised network's ability to handle increased volume.

Answer

Carol B. Tomé (CEO, UPS) attributed expected growth to a stabilizing US small package market (excluding Amazon), improved manufacturing outlook, and easier year-over-year comparisons due to past volume exits. Brian Dykes (EVP and CFO, UPS) added that investments in healthcare and automotive are yielding wins, with Q4 2025 showing higher SMB and B2B penetration. Carol B. Tomé also highlighted the success of RFID technology and the Digital Access Program, which grew revenue to $4.1 billion in 2025, driving new commercial business.

Jordan Alliger asked for an updated analysis of international trade flows following the global de minimis changes, whether normal patterns could resume, if shifts are permanent, and what is needed to sustain international margins in the high teens into 2026.

Answer

Brian Dykes, CFO, acknowledged a slowdown in international trade flows, particularly in September due to de minimis, noting that trade is increasingly flowing outside the U.S. He anticipates some permanent changes until a new equilibrium is established, but reiterated that mid-to-high teens international margins remain the target. Carol Tomé, CEO, highlighted the agility of Kate's (International President) team, which made 100 operational changes in Q3 to adapt to shifting trade lanes. She also mentioned strategic investments in Asia, with 16 of the top 20 non-U.S. export lanes showing strong growth, and SMB International growing 9% in many regions, contributing to future momentum.

Jordan Alliger sought further insights into international trade flow analysis following the global de minimis exemption elimination, questioning whether trade patterns would normalize or if shifts are permanent, and what strategies are required to maintain international operating margins sustainably in the high teens, with an outlook towards 2026.

Answer

Brian Dykes, CFO, acknowledged a slowdown in Q3 due to de minimis, observing increased trade flows outside the U.S. He anticipates some permanent shifts until a new trade equilibrium is established, affirming that mid-to-high teens international margins remain the target once stability returns. Carol Tomé, CEO, and Kate Gutmann, EVP and President International, highlighted proactive operational adjustments (100 changes in Q3) and strategic investments in Asia, which are yielding growth in non-U.S. export lanes and international SMB segments.

Jordan Alliger of Goldman Sachs asked whether a combination of a resilient consumer and delayed inventory orders could potentially lead to a stronger-than-expected peak season surge, creating a tailwind from increased demand for faster air freight services.

Answer

CEO Carol Tomé conceded that this scenario is 'absolutely possible' but emphasized that the company has not yet received definitive peak season plans from its major customers. She shared an anecdote of a customer CEO who is 'planning to win,' but stressed that UPS will have a clearer picture at the end of Q3. She assured that due to increased network agility, UPS is prepared for any outcome.

Jordan Alliger requested an updated secular viewpoint on domestic and international volume growth, excluding the Amazon reduction and considering ongoing supply chain shifts away from China.

Answer

CEO Carol Tomé reiterated expectations for low-single-digit U.S. market growth and mid-single-digit international growth. She highlighted healthcare as a resilient growth area, with revenue up nearly 5% in Q1. Tomé expressed confidence in UPS's ability to adapt to shifting supply chains due to its global presence, referencing the successful navigation of the 2018 tariffs as a historical precedent.

Jordan Alliger requested an updated long-term view on domestic and international volume growth, factoring out the Amazon reduction and considering ongoing supply chain shifts away from China.

Answer

CEO Carol Tomé reiterated the market outlook from the start of the year: low single-digit growth in the U.S. and mid-single-digit growth internationally. She highlighted strong performance in healthcare, with average daily net revenue up nearly 5%. Tomé emphasized that UPS's global network allows it to adapt to shifting trade lanes, referencing a similar experience in 2018 when the international business still grew despite tariffs.

Jordan Alliger of Goldman Sachs asked for details on the SurePost insourcing, including the volume being brought in-house, the network's readiness, and whether this move is intended to offset the reduction in Amazon business.

Answer

CEO Carol Tomé clarified that the decision was driven by service concerns due to USPS changing its operating model, which would have increased costs and deteriorated service. She stated the financial impact is not material and the transition is going 'swimmingly well.' EVP and President, U.S. Nando Cesarone added that technology now allows for better shipment matching over multiple days, smoothing dispatch and keeping mileage in check. CFO Brian Dykes highlighted that the network's agility, proven by insourcing 1.5 million stops in weeks, will also aid the larger reconfiguration.

Jordan Alliger requested an update on the U.S. Postal Service air cargo contract onboarding, including operational performance and profitability since it began.

Answer

CEO Carol Tomé acknowledged a Q3 mismatch between operational setup costs and the volume ramp, which primarily occurred in September. With the volume now fully onboarded, she expects a much different, more positive Q4. Executive Nando Cesarone confirmed the transition has been smooth, citing positive feedback from the Postmaster General and that resources applied are in line with the original model.

Jordan Alliger requested an update on the double-stack opportunity, specifically regarding its potential size and the expected timing and magnitude of its integration and ramp-up into CSX's business, noting that customers are already bidding for Q2 volume.

Answer

SVP and Chief Commercial Officer Maryclare Kenney expressed excitement about the Howard Street Tunnel, highlighting new connectivity and improved service. She noted that while customers are bidding for Q2 volume, past experience suggests it typically takes a couple of bid cycles for significant conversion, expecting growth this year and in the future for both domestic and international business.

Jordan Alliger inquired about the double-stack opportunity, specifically seeking an update on its potential sizing and the expected timing and magnitude of its ramp-up into CSX's business, with bids already out for Q2.

Answer

Maryclare Kenney, SVP and Chief Commercial Officer, CSX Corporation, expressed excitement about the Howard Street Tunnel, highlighting new connectivity, improved Chicago-Baltimore service, and efficient West Coast-Baltimore double-stack. She noted that significant business conversion typically takes a couple of bid cycles, expecting growth this year and into the future for both domestic and international segments.

Jordan Alliger asked Steve Angel about any customer feedback regarding the competitive landscape, given recent industry developments involving UNP and Norfolk Southern.

Answer

Steve Angel, President and CEO, stated that he has not had those specific discussions with customers since joining the company.

Jordan Alliger asked about the industrial development pipeline, inquiring if recent tariff discussions are accelerating customer decisions and if the previously guided long-term volume tailwind from these projects could see upside.

Answer

EVP and CCO Kevin Boone responded that it is too early to see an acceleration in customer decision-making, as policy rules are still being finalized. He suggested any near-term upside would more likely come from existing projects ramping up faster to meet demand, particularly in the metals sector.

Jordan Alliger asked what factors could drive performance to the upper end of the mid-to-high single-digit EBIT growth range, beyond the baseline scenario.

Answer

EVP and CFO Sean Pelkey identified two key drivers. First, driving even more efficiency and cost savings, particularly in purchased services, building on the success of holding those costs flat in 2024. Second, stronger-than-expected volume, driven by a turn in the trucking cycle, a faster ramp-up of industrial development projects, and a high hit rate on new customer wins.

Jordan Alliger requested more color on the modest improvement in domestic intermodal, its performance relative to international, and whether it was significant enough to impact overall intermodal yield.

Answer

CCO Kevin Boone characterized the domestic intermodal market as having bottomed out, expressing optimism for a more normalized peak season as trucking supply rebalances. However, he clarified that while conditions are stabilizing, it does not yet represent a significant inflection point that would materially move yields.

Jordan Alliger inquired about the factors that could push FedEx's adjusted EPS towards the higher end of its $17.80-$19 outlook, specifically asking if it would be driven by better volumes, an improved LTL environment, or accelerated B2B growth.

Answer

John Dietrich, EVP and CFO, FedEx, responded that reaching the higher end of the range would be a result of 'all of the above,' indicating that stronger revenue performance and a more favorable cost environment than currently anticipated would contribute to achieving the upper bound of the outlook.

Jordan Alliger asked what factors would primarily drive FedEx's adjusted EPS to the high end of its $19 outlook range, such as better volumes, an improved LTL environment, or accelerated B2B growth.

Answer

EVP and CFO John Dietrich responded that 'all of the above' would contribute, indicating that stronger revenue and a more favorable cost environment than anticipated would push results towards the upper end of the range.

Jordan Alliger asked about the factors influencing the low and high ends of FedEx's EPS range, specifically whether it's solely a function of revenue or if other variables are at play.

Answer

EVP & CFO John Dietrich explained that the ultimate EPS landing within the range will be determined by a variety of dynamic factors, including the evolution of global trade, the health of the industrial economy, U.S. domestic demand, and traction in higher-margin B2B verticals, not just revenue.

Jordan Alliger posed a secular question about the impact of tariffs on global trade patterns, asking about potential ramifications for LTL and domestic manufacturing, and the emergence of a 'China plus one' logistics strategy.

Answer

President & CEO Raj Subramaniam confirmed trade patterns are shifting, with growth in Southeast Asia and other regions. He emphasized that FedEx's global network scale allows it to adapt quickly. EVP & CCO Brie Carere added that supply chain regionalization is an ongoing trend and their global sales teams are aligned to track and capture shifting customer demand.

Jordan Alliger asked a secular question about the impact of tariffs on global trade patterns, inquiring about ramifications for domestic LTL and manufacturing, and whether FedEx is seeing a 'China plus one' or 'plus two' logistics strategy emerge.

Answer

President & CEO Raj Subramaniam confirmed trade patterns are shifting, with growth from Southeast Asia, India, and Latin America. He emphasized that FedEx's global scale allows it to adapt quickly. EVP & CCO Brie Carere added that the commercial team is actively tracking customers diversifying out of China to markets like Mexico and Vietnam.

Jordan Alliger of Goldman Sachs asked about the potential for LTL margins in the medium and long term once the industrial economy recovers.

Answer

President and CEO Rajesh Subramaniam expressed tremendous confidence in the LTL business, noting it is well-positioned to rebound when B2B business recovers. He stated that given its link to industrial production, the segment has faced pressure but the company is highly confident in expanding margins in the future.

Jordan Alliger of Goldman Sachs Group Inc. requested more details on the Network 2.0 rollout, its planned progression, and any key learnings or challenges from the ongoing integration in Canada.

Answer

President and CEO Raj Subramaniam reported that FedEx continues to make significant progress, having optimized 200 stations to date, including 130 in Canada. He stated the Canadian integration will be largely complete in early 2025. Subramaniam highlighted that the company is seeing a 10% P&D cost reduction in fully rolled-out areas and plans to have approximately 250 stations integrated by the end of fiscal 2025.

Jordan Alliger asked for clarification on the magnitude of the expected 'lower-than-normal' Q2 EPS seasonality and sought to understand the key drivers giving management confidence in a sharp earnings ramp in the second half of the fiscal year.

Answer

EVP and CFO John Dietrich declined to provide specific quarterly guidance but attributed the Q2 outlook to headwinds from the U.S. Postal Service contract termination and the timing shift of Cyber Week into Q3. He stated that confidence in the second-half recovery is supported by the expected sequential ramp-up in DRIVE program savings and tangible revenue-quality initiatives.

Jordan Alliger asked if the current purchase transportation squeeze implies a significant increase in contract rates during the upcoming bid season, starting early next year. He also inquired if RXO's customers understand the necessity of pushing rates up given the current market conditions.

Answer

Drew Wilkerson, Chairman and CEO of RXO, explained that the outcome of bid season depends on overall demand, and that RXO approaches each customer's story individually. He noted that while there is an opportunity for rates to increase, the focus is also on when routing guides break down, leading to higher-revenue spot loads. He affirmed that RXO maintains close relationships with customers, who are well aware of current market conditions.

Jordan Alliger asked if there were any signs of life in the spot market and whether a favorable spot market was necessary to see a true inflection in gross profit per load.

Answer

CEO Drew Wilkerson stated that a favorable spot market is not needed for RXO to improve its own procurement costs relative to the market, as evidenced by recent gains. However, he conceded that for a broader, industry-wide inflection in profitability, a more active spot market with higher tender rejections is necessary. He noted that for large enterprise customers, routing guide compliance remains high, limiting spot opportunities.

Jordan Alliger asked for the year-over-year volume outlook for Q2 and a comparison of gross profit per load between the LTL and truckload businesses.

Answer

CSO Jared Weisfeld stated the Q2 outlook calls for a low single-digit year-over-year volume decline, with strong LTL growth mostly offsetting a high single-digit decline in truckload. He explained that LTL generally carries a higher gross margin percentage but a significantly lower gross profit per load compared to truckload, which is why strong LTL growth didn't fully offset the weaker TL results in Q1.

Jordan Alliger asked about Coyote's standalone operating performance relative to initial expectations since the acquisition. He also requested details on the components of the $40-$50 million in transaction and restructuring charges for the year.

Answer

CEO Drew Wilkerson stated that RXO is pleased with Coyote's performance relative to the soft market, emphasizing the long-term strategic value of increased scale and cross-selling opportunities. CFO Jamie Harris detailed that the restructuring charges primarily consist of costs related to eliminating redundant technology systems, real estate consolidation, and terminating vendor contracts.

Jordan Alliger inquired about XPO's expectations for incremental margins when tonnage reaches an inflection point, considering the company's insourcing and productivity benefits.

Answer

CFO Kyle Wismans stated that XPO expects incremental margins to be comfortably above 40% during a demand recovery. He highlighted yield initiatives, which are still in early innings, as the biggest contributor to top-line growth and strong flow-through to the bottom line. The reduction in purchased transportation insulates XPO from rising truckload rates, providing strong operating leverage, especially with world-class service and 30% excess capacity.

Jordan Alliger questioned the potential for incremental margins when tonnage eventually inflects, considering XPO's purchased transportation insourcing and productivity benefits.

Answer

Kyle Wismans (CFO, XPO) stated that incremental margins are expected to be comfortably above 40% when demand recovers. This strong flow-through is attributed to continued yield growth initiatives, insulation from rising truckload rates due to insourcing, world-class service, and 30% excess capacity, positioning XPO to capitalize on market recovery.

Jordan Alliger of Goldman Sachs asked about the potential incremental margins XPO could achieve during the next freight up-cycle, given the significant operational improvements made in recent years.

Answer

CEO Mario Harik expressed excitement for the next up-cycle, stating that XPO expects to achieve incremental margins comfortably above 40%, referencing a prior quarter where they reached 70%. He cited several drivers for this, including above-market yield growth, momentum with local customers, expansion of premium services, lower exposure to purchased transportation costs, and significant productivity gains from technology and AI, all supported by ample network capacity.

Jordan Alliger from Goldman Sachs asked why shippers would agree to significant mid-to-high single-digit price increases in the current soft freight environment.

Answer

Executive Mario Harik explained that pricing power is a direct result of XPO's improved service quality. He stated that customers understand the need for investment to maintain high service levels in an inflationary environment and are willing to pay a premium for reliable, on-time, and damage-free delivery for their critical freight within XPO's fast, nationwide network.

Jordan Alliger of Goldman Sachs questioned why shippers would agree to significant mid-to-high single-digit price increases during a soft freight market.

Answer

CEO Mario Harik explained that customers are willing to pay for XPO's substantially improved service quality. He noted that in a capacity-constrained industry, customers understand the need for continued investment. He also highlighted that XPO's pricing remains competitive with best-in-class peers and that the company is successfully winning more service-sensitive freight, including from local customers who value reliability.

Jordan Alliger from Goldman Sachs asked about the demand elasticity relative to price increases and for an outlook on November and December seasonality.

Answer

CFO Kyle Wismans explained that customers accept higher prices because the company's improved service lowers their total supply chain costs. He also noted that yield growth comes from multiple levers, not just rate hikes. He projected that if normal seasonality holds, Q4 tonnage would likely be down in the mid-single-digit range year-over-year.

Jordan Alliger sought perspective on the timing of a demand inflection over the next year, what factors could drive it, and what it would take to return to normal tonnage seasonality.

Answer

Adam Satterfield, CFO, acknowledged the difficulty in predicting the inflection point, noting the prolonged freight recession and ISM being below 50 for most of the last 35 months. He highlighted the company's strong position with capacity and cost control, expecting significant profitable growth when the market turns, potentially in spring 2026, especially if trade uncertainties are resolved.

Jordan Alliger from Goldman Sachs inquired about the timing of a demand inflection, what factors could drive a return to normal tonnage seasonality, and if the market is nearing a recovery point after a prolonged period of weakness.

Answer

Adam Satterfield, CFO, stated that predicting an inflection is difficult, noting the ISM has been below 50 for 32 of the last 35 months. He expressed confidence in Old Dominion Freight Line's readiness for a market turn, anticipating a more capacity-constrained environment post-Yellow's bankruptcy, and suggested that resolving trade uncertainty could be a catalyst for recovery, potentially by spring 2026.

Jordan Alliger from Goldman Sachs Group, Inc. asked about the potential for year-over-year trends in tonnage and revenue per day to improve through the rest of the quarter against easier comparisons.

Answer

EVP & CFO Adam Satterfield confirmed that comps are easing, with July's revenue-per-day decline of 5.1% already an improvement over Q2's 6.1% decline. He noted that July's sequential tonnage performance was slightly better than the 10-year average, providing 'cautious optimism,' but stopped short of calling for a return to normal seasonality for the full quarter.

Jordan Alliger from Goldman Sachs asked about the potential for year-over-year tonnage and revenue trends to improve through the rest of the quarter, given the upcoming easier comparisons.

Answer

EVP & CFO Adam Satterfield confirmed the year-over-year comparisons are easing, with July's revenue decline of 5.1% already better than Q2's 6.1% drop. He noted July's sequential tonnage trend was slightly better than the historical average, providing 'cautious optimism' for the remainder of the quarter, though he stopped short of calling for a full return to normal seasonality.

Jordan Alliger inquired about the outlook for margin and revenue seasonality from Q1 to Q2 amid economic uncertainty, and whether a potential recession's impact would be muted given the prolonged freight downturn.

Answer

CFO Adam Satterfield explained that typical Q1 to Q2 margin improvement of 300-350 basis points is unlikely due to softer revenue expectations. He projected a more modest 100 basis point improvement if daily revenue remains flat with April levels, noting that revenue performance is the largest variable impacting margins.

Jordan Alliger asked for guidance on Q1 to Q2 seasonality for margins and revenue amid economic uncertainty, and whether a potential recession's impact would be muted given the prolonged freight downturn.

Answer

CFO Adam Satterfield explained that the typical 300-350 basis point sequential margin improvement is unlikely due to softer revenue growth. He projected a more modest 100 basis point improvement if daily revenue remains flat with April's levels, noting that revenue performance is the largest variable impacting margins.

Jordan Alliger asked for guidance on the expected sequential change in the operating ratio from the fourth quarter of 2024 to the first quarter of 2025.

Answer

CFO Adam Satterfield projected the Q1 operating ratio to be flat to up 50 basis points sequentially, which is more favorable than the typical 100 to 150 basis point increase. He attributed this improved outlook to an expected normalization of insurance costs as a percentage of revenue, which would offset other seasonal pressures.

Jordan Alliger asked for color on volume trends across different customer segments, such as retail and industrial, and for a potential full-quarter tonnage outlook assuming normal seasonality.

Answer

CFO Adam Satterfield highlighted better performance from retail and, notably, third-party logistics (3PL) customers, while industrial remains weak. He suggested that if normal seasonality were to hold, full-quarter tonnage per day could be down 6.5% to 7.0% year-over-year, cautioning that the company has been underperforming seasonality.

Jordan Alliger from Goldman Sachs requested color on the outlook for total yields or revenue per carload in Q4, including the impact of core price, mix, and other factors.

Answer

President and CEO Mark George stated that the pricing plan is intact and expected to continue for the rest of the year, maintaining good shape versus inflation. Chief Commercial Officer Ed Elkins explained that mixed headwinds are anticipated from more utility coal and less export coal, leading to RPU erosion due to lower seaborne prices. He also noted that growth in natural gas liquids, sand, and scrap metals has diluted merchandise RPU, and a significant supplier issue is expected to take some 'wind out of the automotive side' for Q4 volumes.

Jordan Alliger asked about the puts and takes for total yields or revenue per carload looking ahead to Q4, specifically regarding core price and mix effects.

Answer

President and CEO Mark George stated that the pricing plan remains intact and is expected to continue for the rest of the year, performing well against inflation. He identified mixed headwinds from increased utility coal (less export), natural gas liquids, sand, and scrap metal diluting RPU. He also anticipated a volume headwind in automotive due to a key supplier issue.

Jordan Alliger asked about the timing and potential upside from recently announced industrial development projects, which are expected to add an incremental 150,000 carloads.

Answer

CEO Mark George responded that the industrial development pipeline is robust, with new locations and expansions coming online. He stated the new carloads will materialize throughout the year as facilities reach full production, providing a business tailwind for 2025 and for many years to come.

Jordan Alliger asked about the state of network resiliency, inquiring what is working well and what still needs improvement to ensure sustained fluidity and share gains.

Answer

CEO Mark George explained that decongesting the network by removing over 500 locomotives and 8,000 cars has been critical to improving resiliency and enabling rapid recovery from disruptions. He refuted the notion that resiliency requires retaining costs, emphasizing that it was achieved alongside cost reductions. An executive added that the focus is on network health and asset efficiency.

Jordan Alliger of Goldman Sachs inquired about the nature of the operational initiatives, asking how much is 'basic blocking and tackling' versus 'major sea changes' to better assess the execution difficulty.

Answer

John Orr, COO, characterized the effort as daily hard work to run an efficient railroad, comprising a series of both small and large wins from a deep pipeline of opportunities. Alan Shaw, CEO, framed the success as a function of leadership, a solid plan, and disciplined execution.

Jordan Alliger inquired about the Supply Chain Solutions (SCS) margins, specifically if the e-commerce network productivity issues were isolated to Q3 and if sequential improvement is expected. He also asked about the trade-off between achieving revenue growth targets from a strong sales pipeline in 2026 and maintaining high single-digit margins, considering potential startup costs.

Answer

Robert Sanchez, Chairman and CEO, affirmed that Ryder maintains its earnings leverage targets for Supply Chain, expecting to return closer to target growth rates without compromising margins. Steve Sensing, President, Supply Chain Solutions and Dedicated Transportation Solutions, noted that Q4 would see continued optimization of the e-commerce and last-mile footprint, setting up for a rebound in 2026, and mentioned additional automotive plant shutdowns in the second half.

Jordan Alliger of Goldman Sachs asked about the underlying drivers for the expected recovery in the used truck market and questioned how the Supply Chain Solutions segment maintains strong margins despite slower revenue growth.

Answer

President of FMS Tom Havens attributed the used truck market recovery to low inventory in certain classes, like sleepers, signaling a move toward equilibrium. President of SCS and DTS Steven Sensing explained that strong SCS margins are a result of disciplined execution, including startup effectiveness, continuous improvement, and pricing discipline on new contracts.

Jordan Alliger of Guggenheim Securities inquired about the outlook for the used vehicle market, including key factors that could support or pressure pricing, and asked for details on Ryder's FMS lease pricing methodology, specifically how returns are targeted over a contract's life.

Answer

Chairman and CEO Robert Sanchez explained that the used vehicle market is performing as expected, with sequential price declines driven by aged inventory sales; excluding this, tractor pricing was up. He noted that lower new truck production should benefit the used market. Tom Havens, President of Fleet Management Solutions, added that they target a 150 basis point spread versus WACC on lease deals and that the current inventory mix, with fewer tractors, is more manageable. Robert Sanchez also highlighted that ongoing maintenance cost initiatives will continue to support returns.

Jordan Alliger sought more detail on the 2025 revenue forecast, questioning the low growth expectations for the Supply Chain and Dedicated segments and asking if the outlook could be conservative. He also asked about shifts in vertical demand within the supply chain pipeline.

Answer

CEO Robert Sanchez attributed the cautious outlook to freight market softness and economic uncertainty causing customers to pause on long-term contracts. Steve Sensing, President of Supply Chain and Dedicated Solutions, noted that while sales pipelines are up, decision-making is slow, with a 6-9 month lead time for revenue to materialize after the market picks up. Sensing specified that the pipeline shows strength in industrial, tech, health, and retail verticals.

Jordan Alliger of Guggenheim Securities inquired about Ryder's lease renewal experience amid the ongoing freight slowdown, focusing on new versus renewing customers and the impact of private fleet growth. He also asked for commentary on whether the rental market has bottomed and the potential for a recovery in 2025.

Answer

CEO Robert Sanchez and Tom Havens, President of Fleet Management Solutions, responded. Sanchez confirmed the company is on track to realize the full $125 million benefit from its lease repricing initiative by 2025. Havens added that while it has been a slow sales year, some customers are downsizing fleets upon renewal, but Ryder's value proposition versus ownership remains strong. Regarding the rental market, Sanchez noted that while they are seeing signs of it bottoming with a seasonal Q3 pickup, a broader market recovery is not yet evident, though a 2025 upturn is a reasonable expectation.

Jordan Alliger asked for a high-level outlook on J.B. Hunt's loads and volumes for the upcoming quarter, relative to Q3, by integrating the commentary about customers still expecting a peak season and freight needing to advance inland despite earlier import pull-forwards.

Answer

EVP of Sales and Marketing Spencer Frazier clarified that while the ocean peak season came early, the inland supply chain's peak is driven by consumer demand and will occur as usual for the holidays. He noted that last year's West Coast port volumes were artificially inflated due to strike concerns, and he expects challenging year-over-year comparisons through March 2026, but J.B. Hunt is prepared to support customers through their peak needs.

Jordan Alliger asked for an outlook on J.B. Hunt's loads and volumes for Q4 2025 relative to Q3 2025, considering customer expectations for peak season, the need for loads to advance inland despite an early ocean peak, last year's artificially inflated comps, and current import volumes.

Answer

EVP of Sales and Marketing Spencer Frazier clarified that while ocean peak season came early, the inland supply chain peak is driven by consumer demand and will occur as usual for holidays, with customers expecting a peak. He noted that last year's comps were artificially inflated by East Coast strike concerns, leading to strong West Coast volumes, and expects comps to be challenged through March 2026 due to current import volumes.

Jordan Alliger of Goldman Sachs asked for a deeper perspective on how the upcoming peak season might unfold, given customer forecasting uncertainty, tariff impacts, and difficult volume comparisons, including potential for further freight mix shifts.

Answer

Spencer Frazier, EVP of Sales and Marketing, responded that the peak season outlook is dynamic, as customers are adjusting to trade policies differently. He noted the size and duration of peak will vary, which prompted the company to implement its peak season surcharge program earlier this year. He affirmed that J.B. Hunt is prepared with capacity to serve demand whenever it materializes.

Jordan Alliger of Goldman Sachs asked about the potential for a tariff-driven pull-forward of shipments and the possible impact on volume growth in the second half of the year, such as a move into a destocking phase.

Answer

Spencer Frazier, EVP of Sales and Marketing, noted that while customers are making fluid changes, a consistent theme is the search for efficiency, with highway-to-intermodal conversion a top priority. Darren Field, President of Intermodal, added that the company is not receiving widespread customer feedback about a significant pull-forward, though some occurred from Mexico, and they remain cautious.

Jordan Alliger followed up on the Q1 guidance, asking if the Intermodal segment would be the primary driver of the sequential operating income decline and what the mix between revenue drop-off and margin degradation might be.

Answer

Executive Brad Delco declined to provide segment-specific guidance. He reiterated that Intermodal pricing for the first half of 2025 was largely set during the previous bid season and that Q1 is historically a challenging quarter for trucking assets, reinforcing the expectation of normal seasonality.

Jordan Alliger questioned the competitive landscape for new business in the Dedicated segment and whether shippers growing their own private fleets was creating a headwind for closing deals.

Answer

Nicholas Hobbs, COO and President of Contract Services, stated that they are not seeing unusual competition as their focus is on private fleet replacement, not commoditized freight. He expressed confidence in the sales pipeline and their ability to hit targets, citing the large addressable market.

Jordan Alliger of Goldman Sachs requested more color on the U.S. LTL segment's performance, asking about progress with the sales force reorganization, penetration into small to mid-sized businesses (SMBs), and other initiatives that improved Q2 margins.

Answer

Alain Bedard, President, CEO & Chairman, noted that the sales team is now effectively targeting SMB accounts. CFO David Saperstein highlighted the implementation of Prism billing software and process changes, which reduced DSO from 43 to 35 days. He also mentioned that the company has regained two-thirds of its previously lost SMB revenue mix, contributing to better revenue quality.

Jordan Alliger asked for an update on operational and technology improvements in the LTL segment and inquired about the company's current pricing strategies in a soft manufacturing environment.

Answer

Executive Alain Bedard detailed ongoing technology initiatives, including the implementation of Optum for linehaul and future P&D planning, as well as a new pricing software rolling out in 2025. He stated the company's pricing strategy is now focused on profitable growth by winning back small and medium-sized accounts, which have grown to represent 2% more of the volume mix compared to three months prior.

Jordan Alliger asked about the drivers behind the U.S. LTL margin deterioration in the quarter and the specific steps TFI plans to take in 2025 to improve these margins, even in a flat volume environment.

Answer

Executive Alain Bedard identified the primary issue as a negative mix shift, losing high-margin small and medium-sized business (SMB) customers to lower-margin 3PL and corporate accounts. To combat this, Bedard said TFI must be more aggressive in SMB sales, improve network density organically, and continue cost-cutting measures, including implementing new P&D software. He projected a full-year 2025 operating ratio (OR) between 93% and 95% for the segment, despite a very difficult Q1.

Jordan Alliger of Goldman Sachs asked for Saia's perspective on overall LTL industry capacity, questioning if it will be lower than pre-Yellow bankruptcy levels in the next upcycle and what this could imply for future pricing.

Answer

President & CEO Frederick Holzgrefe stated that the long-term trend of shrinking LTL capacity is unlikely to change and that the inflationary nature of the business will keep the industry rational on pricing. EVP & CFO Matthew Batteh added that capacity is not just about terminals but also about equipment and, critically, drivers, which will be a constraint in the next upcycle. They believe Saia is well-positioned with its recent investments.

Jordan Alliger of Goldman Sachs inquired about Saia's volume visibility and customer sentiment. He also asked what level of tonnage growth would be needed to get back on a normal seasonal track and requested the year-over-year tonnage growth for legacy terminals.

Answer

Executive Matthew Batteh stated that customers are hesitant and taking a 'wait-and-see' approach, and noted that tonnage and shipment growth came from newer, breakeven markets, not the higher-margin legacy markets. He confirmed that legacy shipments were down year-over-year in February and March. President and CEO Fritz Holzgrefe added that while new markets will improve, the immediate focus is on aligning the operating model with available freight in the legacy business.

Jordan Alliger of Goldman Sachs requested more color on Saia's mix optimization efforts and asked if there's a point where both weight per shipment and yield could increase together, or if yield ex-fuel would remain negative year-over-year.

Answer

Executive Matthew Batteh explained that mix optimization involves leveraging their new national network to handle a customer's entire book of business and targeting ideal freight profiles. He stated the significant year-over-year increase in weight per shipment is the primary cause of the negative yield comparison, a dynamic influenced by lapping the freight influx after a competitor's exit. The company's focus remains on improving revenue per shipment.

Jordan Alliger from Goldman Sachs asked for more detail on the 1.7% increase in revenue per hundredweight (ex-fuel), inquiring about the underlying mix and pricing dynamics, trends through the quarter, and the outlook for Q4.

Answer

Executive Matthew Batteh explained that mix impacts the yield metric and the company focuses more on revenue per bill. He highlighted strong contractual renewals and a recent 7.9% General Rate Increase (GRI) as evidence of their commitment to pricing. Batteh noted that while some shipment shifts can occur after a GRI, Saia remains focused on driving price and is not seeing a significant change in the industrial backdrop for Q4.

Jordan Alliger from Goldman Sachs asked whether Union Pacific engages in pre-merger discussions with the Surface Transportation Board (STB) at the same time it is having discussions with a potential partner like Norfolk Southern.

Answer

CEO Jim Vena declined to answer the question directly, stating that the company has provided all the information it intends to at this time within its official announcement and would not comment further on the process of its discussions.

Jordan Alliger of Goldman Sachs questioned whether growth in domestic intermodal could provide a favorable net positive impact on mix, margin, and EBIT, potentially offsetting a volume decline in international intermodal in the second half of the year due to tough comparisons.

Answer

CFO Jennifer Hamann responded that the outcome depends on the magnitude of shifts across all business lines, making it too early to predict the net effect. However, EVP of Marketing and Sales Kenny Rocker added that the company is bullish on the domestic intermodal market for 2025, and Jennifer Hamann noted that recent franchise wins have yet to be fully realized.

An associate for Jordan Alliger of Goldman Sachs Group, Inc. asked for more detail on the productivity initiatives that drove strong incremental margins and how this positions the company for 2025.

Answer

EVP of Operations Eric Gehringer detailed significant productivity gains, including record workforce productivity and locomotive dwell times. He highlighted ongoing opportunities in improving recrew rates, yard efficiency through technology, and optimizing fuel consumption. He emphasized that these initiatives are continuous and have driven approximately $1.4 billion in productivity since 2019.

Jordan Alliger of Goldman Sachs Group Inc. asked about the strong 4% year-over-year increase in miles per tractor, questioning if this is a broader indicator of improving supply-demand dynamics and if this trend is expected to continue.

Answer

CEO Adam Miller attributed the improvement to two main factors: the disposal of underutilized and unseated tractors, and genuine productivity gains on the remaining seated fleet. He confirmed this is another sign that the market is slowly improving and that the worst is behind them. Miller emphasized that improving utilization is a key focus for the company as it drives significant operating leverage.

Jordan Alliger inquired about the recent spike in insurance and claims costs, asking for details on prior-period developments and what a normalized run-rate might be going forward.

Answer

CEO Frank Lonegro and Executive James Todd explained that the quarter was unique, with a significant $11.4 million unfavorable adjustment to prior year claims, primarily from cargo theft and accident severity. Lonegro noted that while the historical 4.9% of BCO revenue is likely too low in the current environment, Q1's 9.3% is abnormally high. Executive Matthew Miller added that the company is investing in a dedicated fraud department and new technologies to combat increasingly sophisticated cargo theft.

Jordan Alliger of Goldman Sachs inquired about the performance differences between the dry van and flatbed (unsided) businesses, particularly given sluggish manufacturing. He also asked for customer sentiment on a potential bottom in the manufacturing sector.

Answer

CEO Frank Lonegro stated the company remains bullish on its unsided/platform business, where it has a competitive advantage. CFO James Todd noted that sequentially from Q2 to Q3, unsided pricing outperformed van pricing, but van loadings held up better than platform loadings. Lonegro attributed the manufacturing slowdown to broad uncertainty around politics, trade, and Fed policy, suggesting businesses are delaying capital deployment until there is more clarity.