Reed Seay

Reed Seay inquired about customer retention expectations for FirstFleet post-acquisition and sought clarification on the negative mix shift impacting one-way revenue per total mile, despite targeting higher-value niche freight.

Answer

Derek Leathers, Chairman and CEO, expressed high confidence in FirstFleet customer retention due to strong existing relationships, the dedicated model's stickiness, and Werner's ability to enhance services. He clarified that the negative mix shift in one-way revenue per total mile is due to a strategic focus on longer length of haul, team environments, and Mexico cross-border freight, which inherently have lower per-mile rates despite being higher-value services.

Reed Seay inquired about expected customer retention following the FirstFleet acquisition and sought clarification on the negative mix shift impacting One-Way revenue per total mile despite targeting higher-value freight.

Answer

Chairman and CEO Derek Leathers stated that FirstFleet's customer retention is expected to be strong due to deep, longstanding Dedicated relationships, Werner's prior knowledge of most customers, and the difficulty of displacing Dedicated services. He believes Werner will enhance FirstFleet's capabilities with lower costs and additional portfolio options. Regarding One-Way revenue per total mile, Leathers clarified that the restructuring focuses on longer length of haul freight (e.g., team environment, Mexico cross-border), which inherently results in a lower rate per mile, even with mid-single-digit contract renewals for niche freight.

Reed Seay from Stephens asked about the significantly lower CapEx guidance for 2025 and 2026 compared to historical levels and prior expectations, seeking clarification on the underlying drivers.

Answer

CFO Adam Satterfield explained that the lower CapEx is a function of the recent volume environment and substantial investments totaling $2 billion over the last three years. He highlighted over 35% spare capacity in the service center network, allowing the business to grow into existing infrastructure before requiring significant new capital outlays.

Reed Seay asked about the drivers behind the significantly lower CapEx guidance for 2026 compared to previous years and expectations.

Answer

Adam Satterfield, CFO, explained that the lower CapEx is a function of the volume environment over the past few years and consistent investment, with $2 billion spent in the last three years. He highlighted that the company has over 35% excess capacity in its service center network, built to handle significantly more shipments. The current CapEx is primarily for in-flight projects and necessary fleet replacements, aiming for the business to grow into the existing network.

Reed Seay from Stephens asked if Old Dominion Freight Line is observing any market changes or impacts from competitors' investments in service and network, or from a peer company preparing for a spin-off.

Answer

Adam Satterfield, CFO, stated that Old Dominion Freight Line has not observed significant market changes from competitors' investments, citing the Mastio study which shows the company maintaining a wide lead in service, ranking number one in 23 out of 28 attributes, and emphasizing their continuous focus on service and employee training.

Reed Seay asked if Old Dominion Freight Line is observing any changes in the market due to competitors' investments in service and network, or impacts from peers preparing to spin off from parent companies.

Answer

Adam Satterfield, CFO, referenced the Mastio study, indicating no significant movement in service gaps between Old Dominion Freight Line and competitors, with Old Dominion Freight Line maintaining a wide lead in 23 of 28 attributes. He noted that despite competitor claims of service improvements, it hasn't been reflected in Mastio data or customer feedback.

Reed Seay asked about Mac Pinkerton's early insights and priorities for the Asset-Light business, given his recent appointment and the segment's importance to the Investor Day guidance.

Answer

President and CEO Seth Runser welcomed Mac Pinkerton, COO of Asset-Light Logistics, who expressed excitement about ArcBest's culture, customer focus, and innovation. Mac Pinkerton affirmed confidence in meeting Investor Day targets, highlighting the urgency to improve Total Shareholder Return (TSR) and make the Asset-Light business more meaningful in discussions, regardless of market improvements.

Reed Seay asked for early insights and priorities from Mac Pinkerton, the new COO of Asset-Light Logistics, given his recent start and the segment's importance to ArcBest's Investor Day guidance.

Answer

Seth Runser, President and CEO, introduced Mac Pinkerton, COO of Asset-Light Logistics, who shared his initial impressions. Mac expressed excitement, highlighting ArcBest's strong culture, customer and employee focus, and innovation. He reaffirmed confidence in meeting Investor Day targets for the Asset-Light business and emphasized the team's urgency to improve total shareholder return.

Reed Seay inquired about the factors influencing 4Q term contract pricing, specifically whether it reflected a demand outlook for 2026 or near-term pressures, and sought color on 1Q pricing conversations given reported spot rate bottoming. He also asked about coastal revenue growth, its relation to price increases versus volume, the impact of increased shipyards, and expected cost implications in 1Q 2026.

Answer

CEO David Grzebinski and President and COO Christian O'Neil explained that 4Q term pricing, down low single digits, was primarily due to early 4Q demand softness and near-term pressures, not a reflection of the 2026 outlook. They noted spot prices rebounded in January, utilization reached 94%, and the refinery complex is improving with heavier crude slates. For coastal, David Grzebinski confirmed that mid-single-digit revenue growth is entirely price-driven due to a heavier shipyard year (10%+ increase in days), which impacts margins by reducing revenue while costs remain. The market remains constructive with no new capacity builds, and while double-digit price increases are less likely, pricing continues to improve.

Reed Seay inquired about the factors influencing Kirby's fourth-quarter term contract pricing, which was slightly down, and whether this reflects customers' 2026 demand outlook or near-term pressures. He also asked for color on first-quarter pricing conversations and the expected impact of increased shipyards on coastal revenue and costs in 2026.

Answer

David Grzebinski, CEO, and Christian O'Neil, President and COO, explained that Q4 term pricing was influenced by demand softness in the latter half of 2025, leading to more barge availability. They noted spot prices have since rebounded in Q1 2026, and the overall tone is much improved. For coastal, David Grzebinski confirmed that the mid-single-digit revenue growth for 2026 is entirely price-driven, as increased shipyard days (up 10%+) will impact volumes and margins. The coastal market remains constructive with no new capacity builds.

Reed Seay asked for an update on inland spot market rates in October, including sequential and year-over-year trends, and the current spread between spot and contract rates. He also sought clarification on the company's full-year earnings guidance, specifically regarding the achievability of the low end of the range.

Answer

David Grzebinski (President and CEO) stated that Q3 spot pricing was down 4-5% with term contracts flat, but spot rates are starting to firm up in Q4. Christian O’Neil (President and COO) added that spot pricing has moved higher since its Q3 drop, and the long-term supply-demand balance remains positive. David Grzebinski confirmed the company expects to be around the low end of its full-year guidance range.

Reed Seay asked for an update on inland spot market rate trends in October, including sequential and year-over-year changes, the current spread between spot and contract rates, and whether the company's full-year earnings guidance remained achievable given recent market softness.

Answer

David Grzebinski, Kirby's Chief Executive Officer, noted that Q3 spot pricing was down 4-5% with term contracts flat, but Christian O’Neil, Kirby's President and Chief Operating Officer, indicated positive momentum in spot pricing in Q4. David Grzebinski confirmed that spot pricing remains above term pricing and that the company expects to be at the low end of its previously provided full-year earnings guidance range.

Reed Seay of Stephens Inc. inquired about the demand drivers behind the recent softness in the inland marine spot market and asked for an update on July pricing. He also questioned whether the strong Q2 power generation revenue was from deliveries or down payments.

Answer

CEO David Grzebinski confirmed a pullback in chemical volumes in July but noted Q3 utilization is still guided to the low 90% range. COO Christian O’Neil added color on seasonal factors and shifting refinery crude slates. On power generation, Grzebinski stated the revenue was from actual deliveries as supply chains improved, highlighting that the backlog still grew 15-20% in the quarter.

Reed Seay asked how C.H. Robinson balances headcount reductions, driven by technology and productivity gains, without compromising the human touch and relationships that shippers and carriers value, potentially losing volume.

Answer

CEO Dave Bozeman clarified that headcount is not a KPI; rather, the company engineers its business, automating friction-heavy, entry-level tasks and not backfilling those roles. CFO Damon Lee added that processes have fundamentally changed due to Lean AI and technology, making human scale unnecessary even with volume returns, citing the example of request for freight quotes. President of North American Surface Transportation Michael Castagnetto emphasized increasing customer-facing and carrier-facing roles, reinvesting in SMB, and using AI to automate low-value tasks (like LTL missed pickups) to free up humans for higher-value relationship-building and problem-solving.

Reed Seay asked how C.H. Robinson balances ongoing headcount reductions with the need to maintain the 'human touch' that shippers and carriers prefer, and how they avoid losing volume as a result of these reductions.

Answer

President and CEO Dave Bozeman clarified that headcount is not a KPI; rather, the company engineers the business, automating friction-heavy, entry-level tasks and not backfilling those roles. CFO Damon Lee added that processes have fundamentally changed through Lean AI, making human scale unnecessary even with volume returns. He cited the example of request for freight quotes, where technology now handles 100% of requests in seconds. President of North American Surface Transportation Michael Castagnetto emphasized reinvestment in customer-facing roles and using AI to automate low-value tasks, freeing up people to focus on higher-value relationship building and problem-solving.

Reed Seay followed up on consolidation, asking if it refers to LTL carriers and if any of the $200 million LTL impact is due to rationalizing less profitable freight before the spin-off.

Answer

President and CEO Raj Subramaniam clarified that consolidation refers to capacity reduction in the truckload business, which is expected to eventually benefit the LTL sector. EVP and CFO John Dietrich added that FedEx Freight is seeing a positive inflection in yield, the first increase in several quarters, reflecting pricing discipline.

Reed Seay followed up on the discussion of consolidation, asking if it refers to LTL carriers and if any of the $200 million LTL impact is due to rationalizing less profitable freight ahead of the spin-off.

Answer

Raj Subramaniam, President and CEO, FedEx, clarified that he was referring to capacity consolidation in the truckload business, which is expected to eventually benefit the LTL sector. John Dietrich, EVP and CFO, FedEx, noted a positive inflection in LTL yield, marking the first increase in several quarters, which reflects disciplined pricing.

Reed Seay asked about the broader truckload market, including temporary tightening, subsequent softening, and insights into capacity exits.

Answer

CEO Frank Lonegro and CFSO Matt Dannegger discussed the encouraging sequential increase in BCO count, the impact of regulatory changes like non-domiciled CDL holders and English Language Proficiency enforcement, and ongoing efforts in BCO recruitment and retention. CFO Jim Todd added that selective pruning of the carrier base has not impacted sourcing ability and has led to wider net revenue margins on brokerage business.

Reed Seay from Stephens Incorporated inquired about the broader truckload market, including temporary tightening, subsequent softening, and insights into capacity exits.

Answer

Frank Lonegro, CEO and President, and Matt Dannegger, Chief Field Sales Officer, discussed the encouraging sequential increase in BCO count, the impact of regulatory changes like English Language Proficiency and non-domiciled CDL enforcement, and the expectation that capacity impacts would unfold over a longer period. Matt Dannegger also highlighted improved gross truck adds and a declining turnover rate.

Reed Seay (Stephens Inc.) asked whether Knight-Swift is gaining leverage in contract negotiations for the upcoming year, given the anticipated capacity tightening, and if shippers are willing to credit this in their pricing discussions.

Answer

CEO Adam Miller stated that shipper responses vary case-by-case. Some forward-looking customers may be willing to secure capacity at more favorable contractual rates, while others prioritize immediate best prices and manage network fallout through mini-bids or spot boards. Miller emphasized Knight-Swift's nimble approach to avoid locking in too much capacity, allowing them to quickly capture market-driven rate changes and improve margins faster than the broader industry when conditions tighten.

Reed Seay asked if Knight-Swift gains leverage in contract negotiations for the upcoming year by discussing the observed market tightening and capacity reduction, or if shippers remain hesitant to acknowledge these factors.

Answer

CEO Adam Miller explained that shipper responses to market tightening vary. Some proactive customers may lock in capacity with more favorable contractual rates, while others prioritize immediate best prices and deal with potential network fallout through mini-bids or spot boards. Knight-Swift aims to remain nimble to capture market-driven rate improvements faster than the broader industry.

Reed Seay, on for Daniel Imbro of Stephens Inc., asked about recent activity in Ryder's warehousing and distribution management business and its potential implications for truckload demand. He also inquired about the competitive landscape and pricing environment in the Dedicated segment.

Answer

Steve Sensing, President of SCS and DTS, reported that warehousing volumes in CPG and omnichannel increased during the quarter, though the sales pipeline is relatively flat. In the Dedicated segment, he acknowledged a competitive environment with decision delays and some lost business in non-specialized areas due to price competition, but affirmed that Ryder maintains price discipline. CEO Robert Sanchez added that Ryder's focus on specialized dedicated provides a different pricing dynamic than standard dry van dedicated.