Q3 2020 Ryerson Holding Corp Earnings Call
See I came in at 10.9% below the year ago period, though much improved from second quarter year over year contraction of 27.9%.
Turning to commodities as noted on our prior earnings call the pricing environment held up better than anticipated during the pandemic as no capacities globally and in North America, adjusted more responsibly falling demand than that experienced during the downturn since 2008, 2009 and 2015 if you.
Thousand 16.
After the slated in the summer months.
Collagen hot roll prices bottomed in August and it improves sequentially in September and October.
Let me aluminum moving average prices ended the third quarter higher relative to the second quarter, while LNG nickel can seem to increase up by 17% at the end of the third quarter compared to the end of the second.
As of the first few weeks of the fourth quarter, both LNG aluminum and let me nickel have continued to maintain relative strength.
While carbon sheet spot steel prices are at a 12 month high with the latest C are you spot print coming in at $684 per net ton.
Very recent events around supply side tension or creating an environment across carbon stainless and aluminum where lead times practically moved into Q1 of 2021. This most resembles conditions last seen in the first half of 2010 and 2011, if we're looking for a few relevant referenced periods.
The probabilities are growing that these conditions will be difficult to unwind for the next several quarters. After that any line of sight, you becomes blurry as a function of ongoing virus impacts demand side recovery and stimulus consolidation versus new phasing of new capacity and overall.
No geopolitical stability.
Longer term, we are keeping a close eye on re shoring and onshoring as a function of several things, including carbon pricing, which would favor us based manufacturers.
Regarding ryersons end markets customer activity in North America also continued to improve on balance if on evenly throughout the third quarter.
During the second quarter volumes.
Ryersons pretty volumes in commercial ground transportation consumer durable food and agricultural equipment, and HPC sector as all improve while metal fabrication and machine shop, industrial equipment, and construction equipment sectors, all declined quarter over quarter [noise].
Regarding the Q4 up 2020 outlook.
Although we saw a recovery progress in both pricing and demand conditions in the third quarter macroeconomic uncertainty prevails beyond the current restocking cycle, given recent economic indicators and an increasing number of confirmed little bit 19 cases.
At this point in the fourth quarter, North American average selling prices are trending higher compared to the third quarter, which we expect to be up zero to 2% with Kurdish shipping volumes above third quarter levels by approximately 2% to 4% overall, we believe the industrial metals economies, improving going into the fourth quarter.
And note that a broader manufacturing recovery of greater than a two to four quarter restocking cycle will depend on economic variables that remain unsettled around ongoing virus impact potential fiscal stimulus and current supply side attention and with that I'll turn the call over to Molly who will discuss the highlights of our third quarter performance.
Thanks, Eddie and good morning, everyone.
And the third quarter of 2020, Ryerson achieved revenues of 831.5 million, an increase of 7.7% compared to $771.8 million in the second quarter of 2020 with.
Tons shipped of 5.8% and average selling prices up 1.7% compared.
Compared to the third quarter of 2019 revenues were down by 272.9 million or 24.7% what tons shipped 18.2% lower and average selling price is 8% lower.
Gross margin expanded to 18.7% in the third quarter of 2020 compared to 15% in the second quarter of 2020, and 18.5% for the same quarter last year.
Included in the third quarter 2020 gross margin is LIFO income of 16.9 million, which represents a $31 million swing compared to the second quarter. When we recorded LIFO expense.
14.1 million.
Although managerial price margins expanded incrementally throughout the quarter due to the impact of CSN, Wwes, ERP conversion, including liquidating, aged inventory and accelerating physical inventory count gross margin, excluding LIFO decreased slightly to 16.7.
1% in the third quarter of 2020 compared to 16.8% in the second quarter of 2020, the increase compared to 15.8% in the third quarter of 2018.
While shipments increased sequentially by nearly 6% Ryerson exhibited strong expense management as third quarter warehousing delivery selling general and administrative expenses rose by only 1.3 million or 1% compared to the prior quarter.
Compared to the same quarter last year, Ryerson reduced warehousing delivery, selling general and administrative expenses by 40.2 million or 24.3%.
Instead of 1.9 million compared to the third quarter of 2019.
And an increase of 10.8 million compared to the second quarter of 2020.
Turning to the year to date result revenues and the first nine months of 2020 or 2.61 billion a decrease of 26.2% compared to the first nine months of 2019.
Is ton ship decreased 17.6%.
An average selling prices decreased 10.4%.
Net loss attributable to Ryerson holding corporation was 49.1 million or a loss of one dollar and 29 cents per diluted chair in the first nine months of 2020 compared to 56 million isn't that income or one dollar and 48 cents per diluted share for the same period of 20.
19.
Ah just isn't that income attributable to Ryerson holding corporation, excluding gain an insurance settlement restructuring and other charges gain or loss on retirement is that pension settlement charge and the associate income taxes on these items was 3.5 million for the first nine months of 2020.
Eight or nine cents per diluted share compared to 56.3 million or a dollar and 49 cents per diluted share for the first nine months of 2019.
Adjusted EBITDA, excluding LIFO with 86.4 million in the first nine months of 2020 compared to 143.2 million in the first nine one of 2019.
Briars and strong and responsive working capital management was clearly illustrated in the third quarter as the company decrease inventory days of supply in line with the market environment to 68 days compared to 85 days at the end of the second quarter and 76 days at the end of the.
The third quarter of 2019.
The company also continue to work with customers during the quarter just significantly reduce the gap between the receivable end tables cycle contributing to a cash conversion cycle of 70 days for the period compared to 91 days for the second quarter and 80 days for the year ago period.
Driven by successful working capital management Reierson generated strong cash from operating activities. During the third quarter of 126 million compared to 82.5 million in a year ago period.
Consequently are free cash flow calculated is cash flow from operating activities and asset sales last capital expenditures was also strong in the third quarter at 114.5 million, resulting in a cashflow yield of 52.4%.
Additionally, we continue to significantly decreased are outstanding that that during the period driving it down by 101 million since June 30th 2020 to 692 million.
September 30th 2020.
Enable by counter cyclical cashflows, we have decreased our net debt by 231 million year today.
Or a combination of opportunistic open market repurchases.
Credit facility borrowing reduction.
In our July refinance to again achieve our lowest and that that level in 10 years.
And further is Eddie also mentioned, we completed a partial pension a new a position in the third quarter is part of our continued efforts are reducing reierson pension plan liability exposure and which is expected to result in economics savings of approximately 7.8 million.
<unk> on a net present value basis.
As a result of the partial a new association Ah Remeasurement of the Ryerson U S pension liability with completed and resulted in an accounting liability increase of 33 million, primarily driven by decreasing discount rate and lower expected pension asked it returned.
Despite expenses related to the bond refinance and driving down and that that ryerson routine a strong liquidity position of 398 million as of September 30th 2020, and increase compared to 350 million as of June 30th 2020.
As of the end of the third quarter, we have invested 17.9 billion into capital expenditures through the first nine months of 2020.
And expect to me are COVID-19 revised cutbacks budget target of 25 million for the full year 2020.
Finally last month, we were proud to announce the redemption of 50 million of our 8.5% senior secured notes do in 2028, which is scheduled to occur Tomorrow October 30th at a redemption cries of 103% of the principal amount plus accrued interest.
This transaction is expected to result in annualized interest expense savings of approximately 4.3 million.
After completion of the partial redemption 450 million aggregate principal amount of the notes will remain outstanding.
In summary, the strong execution of our COVID-19 liquidity strategies as enabled us to once again produced strong operating cashflows maintained ample liquidity throughout the pandemic and further achieve balance sheet improvement through debt reduction.
I would like to reiterate eddie's, thanks to a reierson colleagues, whose hard work has enabled us to continue making progress on this transformation.
Now I'll turn the call back over to Eddie to conclude.
Baseball.
He remarked or in order to to call and as evidenced by her third one.
We played the here and your bill exceptionally well and managed to draw some better cards with the Borg.
Real and life altering cause this pandemic confused as Tokyo Who's been 2009, and 2015 gave us some practice reps around how to continue driving a company transformations University so when clothing.
Come back to the mission of the people.
She was to provide great customer experience as time after time that guilty network of intelligent connected industrial metal service centers around and organizational D. N. A U of culture speed value add skillen analytics, none of that however, as possible without a workforce that work safely in good health and productively with it on.
[noise] questionable desire for continuous improvement gross and contribution.
As far as soon as we complete our 100 and city you're in business, we have such a workforce will be safer working smarter and working together as the pandemic moves stewards month, and we take stock in 2020, so far we already stronger organization today.
At the start of the year of keep doing that.
Working unity toward better days with that and look forward to your questions operator.
Thank you [laughter], if you would like to ask a question they supply pressing stuff on on your telephone keypad if.
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Pause for just a moment to them, though everyone an opportunity to put questions.
Oh, so ask questions to come from Mark M. S. You'll see us from Bank of America. Please go ahead, you're mine is open.
Have you had any Molly.
Ask a couple a couple of those sorts of questions did this 50 million redemption in August October starting to schedule for tomorrow.
That Ah intention Indian attention for that to be paid out of cash on hand, or do you would you need to redraw on the a b O that you were with a few done mostly three Q.
Oh, Yeah. He said he hope you can hear me.
We're we're paying that out of a casual on hand so.
It's from from our perspective about because it's hard to tease I want it to the other casual I mean are casual performance has been an excellent and.
Cause we noted all fourthquarter times are improving so we feel we feel confident that decision and now we're glad to have made it and.
24 hours away.
We're gonna keep working down that done on that we're gonna go.
Okay, Great and then and then I know you can't do another one O three call you know for for another 12 months. So it's one for for 12 month period, but you do have the other.
Special call future, where you can put you down to 100 million at one O. Four was still have real property. So.
I know you kind of do the big one last year or any other kind of big feel leesburg real estate transactions in the works that you can talk about anatomy.
Obviously know who was supposed to supposed to do that or anything kind of thematic read that you can you can live with them.
Oh Man I would I would say this hopefully it'll keep you coming back for more of these earnings calls and.
What I would say is we.
We we've made it clear to stakeholders that we we believe that there's an pop value on our balance sheet and so.
All the all the variables. The line then we would certainly look at prospectively doing another transaction like that but I keep supposed to wait further only to say that we we believe we have on top value on the balance sheet.
Okay, let's let's hope well, thank you very much and good luck.
Thanks, Matt take care.
Thank you, we even though take on next quest from Chris Terry with Dark Shebang could you. Just go ahead. Your line is open.
Thank you you already in Moline, or if you will he's questions to me or what are we supposed to maybe one of the time just give me a a shipment so faithful to uh-huh, 2% to 4% just wanted a theater comment on sort of a two competing forces bring seasonality and.
And then the Covid recovery and how you're saying the hokey shipments Frankie.
Sure, Chris I'm Gonna I'm Gonna ask though I'm Gonna ask my Kevin and and too long to add some.
Well I would only preface properly answered by saying that to Portland too far look good on a on what appears to be a restocking cycle. That's that's pretty robust. So far in terms of you look at you look at Newton's laws being in full effect right now, but we had this very acute reaction to the P. I N done, they're gonna shut down and and now you've got.
You got a bounce back to.
Probably bought us back half of the way depending on what you're in market exposures are so cute portrayed with good. We just don't really know what would be a holiday season is gonna bring and we know that some of the some of the well proven indicators or or problematic as we move into the you know latter part of the fourth quarter, but certainly and some of our end.
Markets too that had been lagging maybe automotive and have been lagging construction, which which have recovered faster we're starting to see some of those and markets show strength and come around which is which is a welcome sight, but I would ask my can come to call them as well.
Oh, okay, good might as well.
Oh, sorry cause I'll I'll figure it. Please go ahead.
Thanks for your question, Chris I think Eddie touched on what we're seeing so far in October and I guess I would back that up a little bit too late to two as we we started seen improvements from the trough that we saw on April me, all through two three and and that sort of stuff up change and improvements has continued so.
Far into October, which you know, we're seeing it across a broad spectrum of and market a few of which which continue to perform better than than maybe we would have expected would be in the ground transportation area as well as consumer durables those those two seemed to be outperforming some others the grand.
[noise] transportation more related to just maybe quicker recovery need for transportation and then the consumer durable peace.
I think we've been surprised the resilience of the consumer and and a whole big transferred where they're spending their money. These days so products going into recreational vehicles boats R. V. A T V. So that sort of thing has been been fairly strong what happens in the holidays. There's three left.
Days, you know that will impact things you know navy touched on on the virus impact So American would the viruses not gonna get worse than it is but some of the films were reading right now certainly do give us some pause.
Okay great.
Okay.
The only thing I wish. This is this is Kevin Richardson the only thing I was gonna add in terms of what we're seeing in fourth quarter is if you. If you go back to the third quarter. What we saw was improvement every month of the quarter and then we shouldn't bookings have been good but if there was every year that's been hard to interpret in terms of volume. This is it.
[laughter] Eddy mentioned as soon as opening comments, but if you look at industry shipments.
Three shipments were down 28 per cent of cute too versus last year and 11 per cent in Q3 versus the prior year. So we feel like it.
The theme is definitely gradual improvement, it's just really hard to get a read but bookings have been good and then we're off to a good start and do the.
Early queue for.
Yeah Christmas is Eddie I, <unk> I would make one comment because the two are somewhat [laughter]. He was so the two have somewhat be coupled a little bit and that is the supply squeeze really kind of it takes us back to the maybe 2010 coming out of 2009, which I referenced in my comments, but clearly Ah.
Nice recovery and supplied tension to me as in the real store I mean, we we always expected the demand would come back to some extent and there'll be a slow clawback of of what was lost from.
From the worst of the of the shut down the the cascaded through the economy, but I think the supply side is really the story and and it's a welcome story, but it seems to have a couple of them demand just a bit and we're going to have to see how durable that is.
But first of all just just a few smaller on him. So I'm just wondering if you could talk on working capital from here, obviously, a really strong quote on that front as as prices have moved up in full to what are your expectations. And then also just lost those relationships so cute.
Thanks.
Yeah, I mean, I wouldn't I wouldn't go any further than what we indicated but I will say this will just like the working capital [laughter]. The Radisson team did an exceptional job and it's been working capital Full-stop No no qualifier when we even looked at I I. This morning, I looked at the D. T O cycle again, just to make sure that there wasn't wasn't some type of major build in accounts payable and it really was.
If anything the a quarter average of of of the D. T O cycle. It's been 40.6 days and then we clocked in at 39.7 for Q3. So it wasn't a wasn't a P. Event, then I look good inventory days and I I looked at receivables collections in a cast immersion cycled solidly under 70 days, So I'm really just a hassle.
Off the wires and team and how the the whole organization rally demand as working capital and I think in queue for Christmas It's hard to call them right. Now we're gonna say, we're gonna say that if I, if I had to bed I'd say that it would be you know maybe modestly positive on the caseloads Saddam's gonna depend on how quickly higher cost is employee starts coming in.
Balanced against shipments gross margin the gross margin profile looks good so far so there's a lot of there's a lot of variables in play here in terms of you know you think about that bungee jumped metaphor, where you got these major oscillations in a lot of things that are coursing through your financial statements, but just given the tenor of the quarter. So far I would say be modestly positive, but I would.
Only qualify that answer by saying that it really depends on the speed at which different other factors come into play such as eventually inventory costs are gonna go up just because of where underlying commodity drivers are and and where they seem to be settling for now and as the man continues to recover hopefully going into Q1 and.
And again I think we're all looking forward to some more economic support on the fiscal stimulus odd even though that seems to be paused at the moment you know if that demand continues to recover then we could actually be in and what we hope is gonna be the historical eight to 10 quarter upcycle in the industry, where we might have some working capital build that we would <unk>.
Set that by greater EBITDA generation, and and expanding margins for a period of time.
Thank you and just laughter.
I'm sorry.
Lots of expectations for okay.
Yeah, Oh I agree to take that one yeah. Please oh, yeah. Thanks, Yeah. Yeah. This is Molly hi, Chris. Thanks for the question Yeah, LIFO I think we're we're expecting right now to be relatively LIFO neutral for the fourth quarter. Obviously, there's a lot of variables that go and go into the calculation, but we're expecting it'll be around and and a new.
Neutral event.
[noise]. Thanks, Thanks for calling and then just the last one for me on on in Margaret you've gone through some of the moving part with anything else <unk> is a direction cause the strikes, though or witness that you wanted to come in on for Ya you major in market. Thank you.
Yeah I'll I'll go ahead and get this over to Mike and Kevin I, only say that it's still pretty hard upon a bicycle and and there's not a lot of applying selection. So there's still dislocations that were seen particularly from overseas supply changed for a variety of reasons, whether it's trying to get crews position on the ships to to bring those to bring those cargos.
From from ship to shore. So there's still a lot of dislocations in the supply chain and then you've got demanding expressed around the home and so you know home furnishings appliances anything to do with the home you can try finding a contractor. These days. So there's a real bifurcation between you know who can spend money and who can and and what they're spending at all.
On a boat certainly we you see recoveries in automotive I mean, you've seen Ford's blow out quarter and seem really good trends that we didn't think were even possible back in April and may and so that would be those would be my comments around and markets.
I would I would have some lightning coming to comment as well.
Yeah. Chris. This is this is Mike again, I, I think Eddie Izzard pretty well.
[noise] recoveries been been fascinating to watch given given the nuances from market to market some areas like I touched on before and consume around I'm surprised us and then some products are incredibly strong right now and and and going into products that one wouldn't have thought would've been as busy as they are today.
But.
That's that's the way it's working you know, but there's other markets that you know really been fairly okay through the through the entire pandemic in your stomach start to think about products that go into medical supplies health care industries emergency vehicles that sort of thing so the those things of sort of just.
<unk> held their own and in some cases growing up maybe slight slight surprise in Q3 is oil and gas picked up very slightly okay, but put that in perspective, it's it's having a pretty challenging year. So that's up just very slightly from a from a very low starting point.
But other than that it's is Eddie touched on a mixed bag, but generally speaking their overall trend has been up you know starting back really Q3 and.
So first of October that trend continues.
Thanks, everyone for the the data Okay. One one more just on margins for for the.
Okay any any comments on your expectations.
Yeah, I mean, the margin profile looks good and so.
Just given the given the variables that are in play as we mentioned, we we referenced in the in the in the in the script and you've been in the materials that the margin profile looks good and.
We we we hope it continues.
But I I would say pricing conditions.
Are the best they've been all year.
Okay, no not arrange for the actual margin you're expecting them on the corner.
Wouldn't wouldn't really proper proper an estimate at this point, but certainly better.
Okay, all the rest around especially the answers.
Thank you Chris take care.
Thank you if you'll find question has been answered you may remove yourself from the queue by press start to Cleveland I'll take our next question from drive a test from B M. O. Please go ahead. Your line is open.
Hey, guys How's it going.
Hey, Joel how are Ya, okay alright.
I I wonder if it's just the the the lower warehousing delivery and S. G and a cost is there any way you can give us a sense of how much of that a structural versus justice you know taking it out because you know business has been a little bit weaker.
Yeah, I'm Gonna I'll actually my last job I'll ask John orchards comment on that because I think you know the operation out of the house is gonna really excellent job on on verbalizing, the cost structure, but Joel I think Molly reference being rude comments and we feel that we can we can hang on to to half of the cost steakhouses.
Get back to preclude with volume levels and she's got a really good job I'm looking at you know, where we can take all costs and and what what we can keep in what we might have them come back into the center of the table as as volumes pick up in his activity picks up the Johns do you Wanna you Wanna make a couple of comments.
Sure thing. Thanks study Joe as was mentioned earlier, we've we've really focused on the asset management and efficiency of our business in particular, we've been driving operational initiatives to increase asset utilization along with computers generously improve and be an algorithm that were years.
To optimize our Andrew in the supply chain networks and there's just this is the work that is driving the games and productivity and expenses improvement.
So Joel as an example, we've been as a as a team. We we took on Ah I'm very structured and we all develop project to really analyze on the complaint and when we did that would put analysis, it's really getting to where we can get the most throughput dollars per ton a pound and so.
To increase service levels, but there's a lot of work you can do in these types of conditions, where you you really come come to a a cyclical trough in this case I'm a cyclical depression for a period of time and it accelerated some of the work we do around really looking at the overall network, where we've where we process and how we process and work with them. They can do the most good.
So so there's some really good work has been done across various parts of the network to take out some some structural caused that won't come back.
That's that's excellent is there any way to tell if you guys are gaining share.
Well I'll tell Ya. So we have that we're gonna have to look at it over a one year period, just because of the the end market activity I mean look when I want to know about demand and a lot of sectors I I frankly read what you put out and.
I mean, you're you're you know you're seen in class eight for example, receiving classy so when when we look at it and markets coming back.
If you'd like for instance in queue too.
Mark into your games are really strong because we we were doing a lot of transactional business and some of our end markets, we're actually telling out at that point and so because of the acute nature of your automotive shut down and because some of your other verticals that really went offline with more with more impact you know market to your games, where we're really.
Hi, and can choose for example than in Q3, we noted that we have the C. As in W. V. R. P conversion, where we we gave up some revenue. So we're gonna have to look at markets here really over the course of a whole year, but I will say that <unk>.
Viruses based business, particularly on the transactional side is looking good when when we think about market share gains it's been more than the program and I'd say O M side, especially around heavy equipment and then some of the issues that we note around C. As in W. Where we've got some we've got some cross currents in our Mark.
Sure data.
But we're gonna have to look at it over a longer interval, but Ah get transactional Saddam reierson looks really good.
And then the the the last one for me is is there any way that you can use between your your stuffed up systems and and all of this disruption that's going on can you use this opportunity to try to change your mix a little bit more aggressively than you would have you know thinking about coming into 2020.
Yeah, I'm Gonna I'm Gonna have Kevin talk about that a little bit of just a second but absolutely. If you look it could you look at the thesis in in in gym class and really I think provide some insight into this as well, but you look at the central acquisition, we were able to really acquire into some higher value add mark.
What's your segments that really complimented our portfolio, particularly long into the Doctor know played and so you know they're appointed systems ties you Gotta really well with the work we do in and see us W. Because we know that we knew when we bought the company we were going to have to modernize the system. It did very well with our strategy digitalization and and really using technology to drive.
Better service better relationships with better grow with but when you think about some of the things we've done on the virus advanced processing side. We're we're doing more I'd say you know.
Part manufacturing, which is higher value add for certain customers and you think about some of the value added equipment that we've invested in you can see where we can continue to drive that value add percentage, which is an internal K E. I right. So we we know that since 2010, we've gone from what we call 6% high value at 10%.
I value at which is moving beyond <unk> cutting bar and <unk> and burning simple played shades, but it's it's multiple excuse me it's multiple fabrication steps. So we we've taken that from 6% to 10% in our next [noise]. Our next Whistlestop is 15% on that one I'll call very high value add curb, but I would ask.
You know Kevin agenda, some color to that.
Eight eight Jules Kevin Richardson, Yeah, I mean that they get he said it well changing the mix just been a big part of our strategy and if you look at where we've deployed our capital.
Talked about this in the past whether it's through the acquisitions that we've made or through the internal Passover. We deployed it's all been to try to have more value add in terms of what that over all mixed represents and I think it's getting back to your question in this environment. We do see more opportunity is oem's trying to variable is their cost structure in there.
Willing and you want it all for sure that first or second stage processing. So.
Oh really set up well in terms of what our capabilities are now which is five or six years ago in terms of what that equipment profile looks like so so we feel very optimistic in terms of.
Address that we've made and where we're going.
Oh, that's awesome. Thank you. So much you guys who've done a great job of transforming this company.
Thank you.
Hey, Angel.
Really appreciate that thank you.
[noise] [noise] once again, if you would like to ask a question. Please press star one even though take our next question from still get.
Is it Keybanc capital market. Please go on your line is open.
Hi, good morning.
Alrighty How're you doing.
Alright, [laughter] alright.
Eddie on the side of.
Great because I know you guys do obviously, a lot of moving of things in the economy and.
Just curious what you're seeing in terms of trucking availability and pricing and and whether or not.
Just general inflationary pressures are emerging there again.
[laughter] well the answer would be yes, we received that and it. It is it is it in.
In hindsight, maybe it's not a surprise onions kind of surprises me been going through it cause it just shows how attention and how sort of binary the free market can be when you look at [noise] longterm factors, such as you know drivers and email, but he had drivers and frankly, the availability of flapping and it's one of those things it's under reported in this industry.
The segment in Alaska again, I'll ask John work, then it might contaminate a pitching on this but there really is a flatbed trucks shortage relative to reefers in bands, even when you get into third party afraid organizations and they tell you about all the capacity they have all the units they have access to when you get around to talking about flatbed the Congress.
Pretty silent pretty fast and so we could use the more capacity and obviously, we could use more drivers in the in the industry as a whole and I think you know what you're seeing now underscores that we're even though fuel prices still haven't really come back I think the overall cost of transportation or are heading up as the economy rebounds, but you know Jonathan a lot of work and.
This area for us and.
I would say you know, Mike and Kevin <unk> anybody want to comment on Friday.
Hey, Thanks, Betty and and you're right. This is certainly an area, where we did not anticipate these type of inflationary pressures. However, I would really complement our our team.
What we've been able to do two drive better utilization of our logistics networks in particular, we've been focused on developing some tools and analytics to increase the average wait for trucks and also to increase the number of stops per delivery. So by you know gaining insight and.
And are those metrics were able to consolidate loads and really work to bend those those costs more and I'll tell ya.
[noise] and really it's truly to contribute to the theme and I'll I'll I'll just I'll just get a quick shot out to Derek Elizabeth and tile just for the work they've done along with so many others in our organization to really improve the structural way in which we approach frayed, which is where we can get longer term efficiencies in cost savings and I'm, sorry somebody else from our team was going to speak.
[laughter].
I think.
[laughter] no I'm good.
Okay, I'll I'll I'll speak.
Is that okay, alright, Yeah man.
Yeah, I Wanna list is half of the Wizard badge can I get one of them.
Capital Wizard badge.
Yeah, you've been one of those please.
What's that Molly Molly Molly gets one too working capital.
Yeah, I'll I'll I'll send you got some hats so [laughter].
[laughter], great that'd be great that'd be great. Thank you.
And and just on a on a on a trucking side.
I can't remember if we address this a couple of years ago last time afraid was really tight but uhm how.
How much of your one of your own fleet do you do you own relative to your volume.
You know I'm Gonna I'm Gonna say, it's it's about it's probably half and half, but you know I think what we can do is pitch in here I know you know we're more three P. L leopard in in certain of our of our businesses and we're more company owned and others, but my Kevin.
John J C anybody wanted to chime in here.
You feel the same I can burbach, you know I I kind of like.
If you look at it from a standpoint of how much of our customer freight is going on dedicated trucks, whether we own it or we have a contract with a third party provider that's a very high number.
But to hate the guess an exact number but it's it's the vast majority of our business goes through that type of arrangement.
Probably where we're see do you know the the inflationary pressures that people talked about more so is long distance rounds, maybe for meals to us or for whatever reason products going outside of normal channels, but if you look at what our customers see from us.
Very high percentage you that comes on a company one vehicle or are company owned a truck or you know someone is dedicated to us.
Thank you so that would be based on what you said earlier and based on what we're seeing as well I mean, the steel mills right now have good backlogs, particularly on the sheets to lead times are very extended.
Mm arguably bottleneck he's got some some bottlenecks emerging in and freight.
Any other.
Any other bottlenecks that you see out there given the fact that everybody ribs.
You know ripped down.
Ripped down cost so fast as as an economy in with today's G. D. Print G. D. P. Print we saw it obviously bounceback pretty aggressively so what other bottlenecks to see.
You know out there in the economy that need some time to get remedies. Thanks.
Yeah sure no. So that's a great question it it's really fluid right now.
It it really depends where you where you are and and where your exposures are but in general I think you've hit on one which is there's been a really quick rebounded and flatbed demand and and trucking capacity, which which makes sense.
You're also I mean, this kind of ties a lot of things together on the call. The prints for example, warehousing distribution is just pop in and everything to do with warehousing and distribution is just popping in terms of what all goes around around the warehouse and you know there's a truck in ball the trailer involved the warehousing ball Crane side Motors work with some really more and more automated patrol he owned equipment. So.
Everything related to the warehouse and distribution is mmm is going gang busters right now.
And and so when we looked at bottlenecks, they're frankly surprisingly, there's some labor bottlenecks you wouldn't eat that's one of the things you didn't see from Oh nine to 2010, but again there. There certainly are still latest labor dislocations, where I would say, it's not exclude as you would think just given.
You know given the current in any extremes that we witness since march through to the through today, depending on on what needs you have.
Within your Labor Force Labor is is tightened some areas and so that would be <unk>.
That'd be the other bottleneck, we we we know of places I mean, certainly wouldn't mention them by name was called but we know places where it's not it's not that they don't have a backlog, they're having a difficult time assembling cruise to turn over that backlog as as quickly and efficiently as they would like.
Thanks, Eddie empty good job.
Thanks, So I really appreciate it.
Well I think I I think we're I think we're out of questions just.
Just when I think we really got rolling but look thanks for everybody into your questions and most of all we wish everyone, a safe healthy and meaningful holiday season, and will we will look forward to being back with you in February of 2021, and will review Q4, and the four year, so everybody take care and thanks, so much for your interest in virus.
But that will conclude today's conference. Thank you everyone for your participation.
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