Rita Hardin

Rita Hardin inquired about the outlook for Q1 2026, seeking clarification on why the guidance wasn't more robust despite identified tailwinds, and asked for insights into Q1 seasonality relative to the full year and expected margin progression given recent cost initiatives.

Answer

CEO Adam Miller explained that while October saw project activity, November volumes were disappointing, and despite late December strength, Q1 typically doesn't reflect full bid season benefits. He noted early January showed better supply/demand balance, leading to constructive bid season conversations for low to mid-single-digit rate improvements. CFO Andrew Hess added that Q1 is seasonally challenging, with no significant year-over-year rate lift expected, but anticipated continued cost progress and LTL volume build-back.

Rita Hardin asked about the outlook for Q1 2026, specifically why it isn't more robust despite anticipated tailwinds for the full year, how Q1 seasonality might compare to the rest of the year, and the expected progression of margins given cost-cutting efforts.

Answer

CEO Adam Miller explained that Q4 volumes were disappointing, but early January showed a more constructive balance between supply and demand. He noted that the benefits of bid season, including potential low to mid-single-digit contract rate improvements, would likely not fully materialize until Q2 or later, making Q1 feel better than it looks in results. CFO Andrew Hess added that Q1 is typically a challenging quarter for significant rate lifts, but cost progress and improved cost per mile are expected. He also mentioned monitoring LTL volume build-back.