Q2 2024 J B Hunt Transport Services Inc Earnings Call

Yes.

Abby: Ladies and gentlemen, good afternoon, and thank you for standing by. My name is Abby, and I will be your conference operator today. At this time, I would like to welcome everyone to the J.B. Hunt Transport Services second quarter 2024 earnings. All lines have been placed on mute to prevent any background noise.

Unknown Executive: Ladies and gentlemen, good afternoon, and thank you for standing by.

Abby: Ladies and gentlemen, good afternoon, and thank you for standing by my name is Abby and I will be your conference operator today.

Unknown Executive: My name is Abby, and I will be your conference operator today.

Unknown Executive: At this time, I would like to welcome everyone to the JB Hunt Transport Services Second Quarter, 2024 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. And if you would like to ask a question during that time, you simply press the star key, followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one a second time.

Speaker Change: At this time I would like to welcome everyone to the J B Hunt transport services second quarter 2024 earnings call.

Speaker Change: All lines have been placed on mute to prevent any background noise.

Abby: After the speaker's remarks, there will be a question and answer session, and if you would like to ask a question during that time, simply press the star key followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one a second time. Thank you. And I would now like to turn the conference over to Brad Delco, Senior Vice President of Finance. You may begin. Good afternoon.

Speaker Change: After the Speakers' remarks, there will be a question and answer session and if he would like to ask a question during that time simply press. The star key followed by the number one on your telephone keypad.

Speaker Change: If you would like to withdraw your question Press Star one a second time.

Unknown Executive: Thank you, and I would now like to turn the conference over to Brad Delco, Senior Vice President of Finance.

Speaker Change: Thank you and I would now like to turn the conference over to Brad Delco Senior Vice President of Finance you may begin.

Unknown Executive: You may begin. Good afternoon.

Brad Delco: Before I introduce the speakers, I would like to provide some disclosures regarding forward-looking statements. This call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as expects, anticipates, intends, estimates, or similar expressions are intended to identify these forward-looking statements.

Speaker Change: Good afternoon before I introduce the speakers I would like to provide some disclosures regarding forward looking statements.

Unknown Executive: Before I introduce the speakers, I would like to provide some disclosures regarding forward-looking statements. This call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, or such as expects, anticipates, intends, estimates, or similar expressions are intended to identify these forward-looking statements. These statements are based on JB Hunt's current plans and expectations and involve risks and uncertainties that could cause future activities and results to be materially different from those set forth in the forward-looking statements.

Brad Delco: These statements are based on J.B. Hunt's current plans and expectations and involve risks and uncertainties that could cause future activities and results to be materially different from those set forth in the forward-looking statements. For more information regarding key risk factors, please refer to J.B. Hunt's annual report on Form 10-K and other reports and filings with the Securities and Exchange Commission. Now I'd like to introduce the speakers on today's call. This afternoon, I'm joined by our President and CEO, Shelley Simpson. Our CFO, John Kuhlow.

This call may contain forward looking statements within the meaning of the private Securities Litigation Reform Act.

Speaker Change: 95 words, such as expects anticipates intends estimates or similar expressions are intended to identify these forward looking statements. These statements are based on J B Hunt's current plans and expectations and involve risks and uncertainties that could cause future activities and results to be materially different from those set forth in the forward.

Unknown Executive: For more information regarding key risk factors, please refer to JB Hunt's annual report on foreign 10-K and other reports and filings with the Securities and Exchange Commission.

Speaker Change: Looking statements for more information regarding key risk factors. Please refer to J B Hunt's annual report on Form 10-K, and other reports and filings with the Securities and Exchange Commission.

Unknown Executive: Now, I would like to introduce the speakers on today's call. This afternoon, I am joined by our President and CEO, Shelley Simpson; our CFO, John Kulo; Spencer Frazier, Executive Vice President of Sales and Marketing; our COO and President of Contract Services, Nick Hops; Darren Field, President of Intermodal; and Brad Hicks, President of Highway Services and Executive Vice President of People.

Speaker Change: Now I would like to introduce the speakers on today's call.

Speaker Change: This afternoon, I am joined by our President and CEO Shelley Simpson, our CFO, John Kuo, Spencer Frazier Executive Vice President of sales and marketing.

Speaker Change: Our COO and president of contract services, Nick Hobbs, Darren field, President of intermodal and Brad Hicks President of Highway services and executive Vice President of people I'd now like to turn the call over to our CEO Ms. Shelley Simpson for some opening comments Shelley.

Shelley Simpson: I'd now like to turn the call over to our CEO, Ms. Shelley Simpson, for some opening comments.

Brad Delco: Spencer Frazier, Executive Vice President of Sales and Marketing. Our COO and President of Contract Services, Nick Hobbs, Darren Field, President of Intermodal, and Brad Hicks, President of Highway Services and Executive Vice President of PEOPLE. I'd now like to turn the call over to our CEO, Ms. Shelley Simpson, for some opening comments. Shelley?

Shelley Simpson: Shelley? Thank you, Brad, and good afternoon to everyone on the call. I'd like to start by saying I'm humbled and honored to recently extend the role of CEO and to lead our great company on the next phase of our growth journey.

Shelley Simpson: Thank you, Brad, and good afternoon to everyone on the call. I'd like to start by saying I'm humbled and honored to have recently assumed the role of CEO and to lead our great company through the next phase of our growth. While recognizing this is a big moment as only the fifth organizational leader in our company's 62-year history, let me be clear. Our vision, our mission, and our focus have not changed. We have a large addressable market.

Shelley Simpson: Thank you Brad and good afternoon to everyone on the call.

Shelley Simpson: I'd like to start by saying I am humbled and honored to have recently assumed the role of CEO and to lead our great company on the next phase of our growth journey.

Shelley Simpson: While recognizing this is a big moment as only the best organizational leader in our company's 62-year history, let me be clear. Our vision, our mission, and our focus have not changed. We have large, addressable markets. We provide excellent service for customers. We have talented people across our organization. We are prime, and we are ready to execute on our opportunities for growth.

Shelley Simpson: While recognizing this is a big moment is only the best organizational later in our company's 52 year history, let me be clear our.

Shelley Simpson: Our vision, our mission and our focus has not changed.

Shelley Simpson: We have large addressable markets, we provide excellent service for customers we.

Shelley Simpson: We provide excellent service for customers. We have talented people across our organization. We are primed, and we are ready to execute on our opportunities for growth. My message to the team on day one was quite simple: ready, set, go.

Shelley Simpson: We have talented people across our organization, we are prime and we are ready to execute on our opportunities progressed my message to the team on day, one was quite simple ready set.

Shelley Simpson: My message to the team on day one was quite simple. Ready, set, go. You've heard us say consistently. We remain committed to our investments and managing the business with a long-term mindset. These investments span across our company foundations, which include our people, our technology, and our capacity. Through investments in these key areas, we have a significant number of opportunities to provide value to and on behalf of our customers across our suite of complimentary service offerings. Our focus remains on deploying capital in areas of the transportation industry where we see a long-term opportunity to generate compounding returns.

Shelley Simpson: Yeah.

Shelley Simpson: As you've heard us say consistently, we remain committed to our investments and managing the business with a long-term mindset. These investments span across our company foundations, which include our people, our technology, and our capacity. Through investments in these key areas, we have a significant number of opportunities to provide value to and on behalf of our customers across our suite of complementary service offerings. Our focus remains on deploying capital in areas of the transportation industry where we see a long-term opportunity to generate compounding returns. We operate in an industry that is, but we have focused on businesses and areas that we feel confident we can compete effectively, take, share, and win. Please do this by remaining financially disciplined.

Shelley Simpson: As you've heard us say consistently we remain committed to our investments and managing the business with a long term mindset.

Shelley Simpson: These investments span across our company foundations, which include our people our technology and our capacity.

Through investments in these key areas, we have a significant number of opportunities to provide value to and on behalf of our customers across our suite of complementary service offerings.

Shelley Simpson: Our focus remains on deploying capital in areas of the transportation industry, where we see a long term opportunity to generate compounding returns.

Shelley Simpson: We operate in an industry that is cyclical, but we have focused on businesses and areas that we feel confident we can compete effectively, take share, and win. We do this by remaining financially disciplined, keeping our focus on the long term while managing cost in the near term, and relying on our vast experience. We will be prepared to meet the growing needs of our customers while driving long-term growth for the company and our shareholders.

Shelley Simpson: We operate in an industry that is cyclical.

Shelley Simpson: But we are focused on businesses in areas that we feel confident we can compete effectively take share and win.

Shelley Simpson: We do this by remaining financially disciplined.

Shelley Simpson: Keeping our focus on the long term while managing costs in the near term and relying on RVAP, we will be prepared to meet the growing needs of our customers while driving long-term growth for the company and our shareholders. Earlier this year, we introduced our priorities for 2024, and we as a management team and as an organization continue to execute on these priorities, which is a reminder that our priority is one to deliver exceptional value to our customers through operational excellence and to scale a long-term investment in our company foundations, which are people, technology, and capacity.

Shelley Simpson: Our focus on the long term, while managing costs in the near term.

Shelley Simpson: And relying on our vast experience.

We will be prepared to meet the growing needs of our customers, while driving long term growth for the company and our shareholders.

Shelley Simpson: Earlier this year, we introduced our priorities for 2024, and we, as a management team and as an organization, continue to execute on these priorities, which, as a reminder, are: one, to deliver exceptional value to our customers through operational excellence. Two, still a long-term investment in our company foundations, which are people, technology, and capacity. And three, drive long-term value and returns for our shareholders.

Shelley Simpson: Earlier this year, we introduced our priorities for 2024, and we as a management team and as an organization continues to execute on these priorities, which as a reminder are one to deliver exceptional value to our customers through operational excellence.

Shelley Simpson: Two stellar long term investment in our company foundations, which are people technology and capacity.

Shelley Simpson: And three, drive long-term value and returns for our shareholders. While the first half of this year has been challenging in terms of our financial performance, we remain focused on delivering exceptional value to our customers. In 2024, we've continued our record performance and safety, and our service levels to customers have been exceptional. We have received multiple awards this year for our high service level from our customers. Our joint intermobile service offering with BNSF, Quantum, is running well above our initial expectation from an on-time service performance.

Shelley Simpson: And three drive long term value and returns for our shareholders.

Shelley Simpson: While the first half of this year has been challenging in terms of our financial performance, we remain focused on delivering exceptional value to our customers. In 2024, we have continued our record performance in safety, and our service levels to customers has been exceptional. We have received multiple awards this year for our high service level from our customers. Our joint intermoble service offering with the NSF Quantum is running well above our initial expectation from an on-time service performance. In dedicated, we continue to prove our value to customers as we've been able to balance the need to be disciplined with underwriting new business while providing customers some flexibility with meeting their needs.

Shelley Simpson: While the first half of this year has been challenging in terms of our financial performance.

Shelley Simpson: We remain focused on delivering exceptional value to our customers.

Speaker Change: In 2024, we've continued our record performance and safety and our service levels to customers has been exceptional we have received multiple awards. This year for our high service level from our customers our joint intermodal service offering would be NSS quantum is running well above our initial expectation from an on time service performed.

Shelley Simpson: <unk>.

Shelley Simpson: In Dedicated, we continue to prove our value to customers as we've been able to balance the need to be disciplined with underwriting new business while providing customers some flexibility in meeting their needs. Final Mile continues to make progress on its profit improvement plan, and we continue to work on areas around cost, integration, and growth in ICS and see some progress in the business. Finally, we remain encouraged about the value proposition for customers and our drop-trailing business in JVT and the future potential of that business.

Shelley Simpson: In dedicated we continue to prove our value to customers as we've been able to balance the need to be disciplined with underwriting new business, while providing customers. Some flexibility was meeting their needs.

Shelley Simpson: Final mile continues to make progress on its profit improvement plan, and we continue to work on areas around cost, integration, and growth in ICS, and see some progress in the business. Finally, we remain encouraged about the value proposition for customers in our drop-trailing business in JVT and the future potential of that business.

Shelley Simpson: Final mile continues to make progress on its profit improvement plan and we continue to work on areas around cost integration and growth in Ics and see some progress in the business.

Shelley Simpson: Finally, we remain encouraged about the value proposition for customers and our drop trailing business and JBT and the future potential of that business.

Shelley Simpson: While admittedly, the market has been challenging, we have invested throughout the downturn to set us up for future growth and success across the business. We continue to focus on controlling expenses in the near term without jeopardizing our long-term potential. Managing our head count through attrition while at the same time continuing to deploy and enhance our technologies to increase the productivity of our people.

Shelley Simpson: While admittedly the market has been challenging, we have invested throughout this downturn to set us up for future growth and success across the business. We continue to focus on controlling expenses in the near term without jeopardizing our long-term potential.

Shelley Simpson: While admittedly the market has been challenging we have invested throughout this downturn to set us up for future growth and success across the business.

Shelley Simpson: We continue to focus on controlling expenses in the near term without jeopardizing, our long term potential managing our head count through attrition while at the same time, continuing to deploy and enhance our technology to increase the productivity of our people.

John Kuhlow: Managing our headcount through attrition, while at the same time continuing to deploy and enhance our technology to increase the productivity of our people. We took advantage of a strategic opportunity to acquire the intermodal assets from Walmart earlier this year, which added capacity to our network but also increased the long-term growth potential of our company, which we believe will drive long-term returns for both the company and our shareholders. The team will provide more details in their prepared comments, but in summary, we will stay the course, and focus on the long term with the same vision: to create the most efficient transportation network in North America. With that, I'd like to turn the call over to our CFO, John Kuhlow. Thank you, Shelley, and good afternoon, everyone.

Shelley Simpson: We took advantage of a strategic opportunity to acquire the intermodal assets from Walmart earlier this year, which added capacity to our network, but also increased the long-term growth potential of our company, which we believe will drive long-term returns for both the company and our shareholders.

Speaker Change: We took advantage of a strategic opportunity to acquire the intermodal assets from Walmart earlier, this year, which added capacity to our network, but also increase the long term growth potential of our company, which we believe will drive long term returns for both the company and our shareholders. The team will provide more details where there.

Shelley Simpson: The team will provide more details with their prepared comments, but in summary, we will save the course, focus on the long-term, with the same vision to create the most efficient transportation network in North America.

John Kuhlow: Good comments, but in summary, we will stay the course focused on the long term what does the same vision to create the most efficient transportation network in North America with that I'd like to turn the call over to our CFO John <unk> John.

John Kuhlow: With that, I'd like to turn the call over to our CFO, John Kula.

John Kuhlow: John? Thank you, Shelley.

John Kuhlow: Similar to recent quarters, my comments will cover a high-level review of the quarter and provide an update on our cost control efforts, while also balancing our investment to Support Future Growth. I'll close with an update on our capital allocation plan for the remainder of 2024. As a general overview, while we have seen some moderation in inflationary cost pressures, the deflationary rate environment continues to pressure our margin. Let me start with a quick review of the second quarter.

John: Thank you Shirley and good afternoon, everyone similar to recent quarters. My comments will cover a high level review of the quarter and provide an update on our cost control efforts, while also balancing our investments to support future growth.

John Kuhlow: Good afternoon, everyone. Similar to recent quarters, my comments will cover a high-level review of the quarter and provide an update on our cost-control efforts while also balancing our investments to support future growth.

John Kuhlow: A close with an update on our capital allocation plan for the remainder of 2024. As a general overview, while we have seen some moderation in inflationary cost pressures, the deflationary rate environment continues to pressure our margin performance. We start with a quick review of the second quarter, on a consolidated GAAP basis compared to the prior year period. Revenue declined 7%, offering income to climb 24%, and diluted earnings per share decreased 27%. But most notably, lower rates were the main drivers of the lower revenue, primarily in our intermodal and highway services businesses, which includes our brokerage business and ICS, and our drop charity business and JVT.

Speaker Change: I'll close with an update on our capital allocation plan for the remainder of 2024.

Speaker Change: As a general overview, while we have seen some moderation and inflationary cost pressures the deflationary rate environment continues to pressure our margin performance.

John Kuhlow: On a consolidated gap basis compared to the prior year period, revenue declined 7%, operating income declined 24%, and Diluted Earnings Per Share decreased 27%. A combination of either lower volumes and or yields, but most notably lower rates were the main drivers of the lower revenue, primarily in our intermodal and highway services, which includes our brokerage business in ICS and our drop trailer business at JVT. Our tax rate in the quarter was slightly elevated at $26.8, but we continue to expect our full-year tax rate to fall in the range of $24 to $25,000.

Speaker Change: Let me start with a quick review of the second quarter on a consolidated GAAP basis compared to the prior year period revenue declined 7% operating income declined 24% and diluted earnings per share decreased 27%.

Speaker Change: The combination of either lower volumes and yields, but most notably lower rates were the main drivers of the lower revenue primarily in our intermodal and highway services businesses, which includes our brokerage business and Ics and our drop trailer business of JBT.

John Kuhlow: Our tax rate in the quarter was slightly elevated at 26.8%; however, we continue to expect our full year tax rate to fall in the range of 24 to 25%. While we have seen improvements across many of our cost categories, the lower revenue continues to put pressure on our margins across our business segments, with the exception of FMS and JVT, which improved operating margins year over year.

Speaker Change: Our tax rate in the quarter was slightly elevated at 26, 8%. However, we continue to expect our full year tax rate to fall in the range of 24% to 25%.

John Kuhlow: While we have seen improvements across many of our cost categories, lower revenue continues to put pressure on our margins across our business, with the exception of FMS and JVT, which improve operating margins year over year. We have been thoughtful and thorough in our approach to managing our costs. Last quarter, we quantified what our commitments to investing in our business through this downturn represented, which was an aggregate of $100 million on an annual basis.

Speaker Change: While we have seen improvements across many of our cost categories. The lower revenue continued to put pressure on our margins across our business segments with the exception of Fms, and JBT, which improved operating margins year over year.

John Kuhlow: We have been thoughtful and thorough in our approach to managing our costs. Last quarter, we quantified what our commitments to investing in our business through this downturn represented, which was an aggregate $100 million on an annual basis. We continue to focus our cost efforts in areas that would not prohibit our ability to support our future growth or our future earnings power. These costs are primarily related to our investments in two of our company foundations, namely our people and our capacity. As to be expected, the majority of these costs are burdened in our JVI business and also, but to a lesser extent, our ICS and JVT segments.

Speaker Change: We have been thoughtful and thorough in our approach to managing our costs.

Speaker Change: Last quarter, we quantified what our commitments to investing in our business through this downturn represented which was an aggregate $100 million on an annual basis.

John Kuhlow: We continue to focus our cost efforts on areas that would not prohibit our ability to support our future growth or our future earnings power. These costs are primarily related to our investments in two of our company foundations, namely our people and our capacity.

Speaker Change: We continue to focus our cost efforts in areas that would not prohibit our ability to support our future growth or our future earnings power.

Speaker Change: These costs are primarily related to our investments in two of our company foundations, namely our people and our capacity.

John Kuhlow: As to be expected, the majority of these costs are burdened by our JBI business and also, but to a lesser extent, our ICS and JVT sectors. Importantly, we remain confident in our ability to grow our business to scale into these investments. Wrapping up with an update on our 2024 capital expenditures, we are updating our guidance for net capital expenditures for the year to be in the range of $650 to $700 million. This compares to our previous expectations of $800 million to $1 billion.

Speaker Change: As to be expected. The majority of these costs are burdened in our GBS business.

Speaker Change: And also but to a lesser extent, our Ics and JBT segments.

John Kuhlow: Importantly, we remain confident in our ability to grow our business to scale into these investments.

Speaker Change: Importantly, we remain confident in our ability to grow our business to scale into these investments.

John Kuhlow: Rapping up with an update to our 2024 capital plan. We are updating our guidance for net capital expenditures for the year to be in the range of $650 to $700 million. This compares to our previous expectation of $800 million to $1 billion. Keep in mind, this does include the previously announced purchase of Walmart's intermodal assets. This reduced plan largely reflects a moderation of both tractor and trailing fleet additions, in addition to real estate projects. While our earnings performance has been under pressure, our leverage at the end of the quarter was 0.9 times EBITDA, below our target of one times.

Speaker Change: Wrapping up with an update to our 2024 capital plan, we are updating our guidance for net capital expenditures for the year to be in the range of $650 to $700 million.

Speaker Change: This compares to our previous expectation of $800 million to $1 billion.

John Kuhlow: Keep in mind, this does include the previously announced purchase of Walmart's Intermodal. This reduced plan largely reflects a moderation of both tractor and trail and fleet additions, in addition to real estate projects. While our earnings performance has been under pressure, our leverage at the end of the quarter was 0.9 times EBITDA, below our target of one time. We also purchased just over 200 million in stock in the quarter.

Speaker Change: Keep in mind. This does include the previously announced purchase of Walmart's intermodal assets.

Speaker Change: This reduced planned largely reflects a moderation of both tractor and trailer fleet additions in addition to real estate projects.

Speaker Change: Our earnings performance has been under pressure our leverage at the end of the quarter was <unk> nine times EBITDA below our target of one times.

John Kuhlow: We also purchased just over 200 million stock in the quarter. With our updated and reduced net capital expenditure plan, current market dynamics, and our view of where we are in the cycle, we believe a disciplined approach to cherry purchases is a prudent use of capital at this time.

Speaker Change: We also purchased just over $200 million of stock in the quarter.

John Kuhlow: With our updated and reduced net capital expenditure plan, current market dynamics, and our view of where we are in the cycle, we believe a disciplined approach to share purchases is a prudent use of capital at this time. This concludes my remarks, and I'll now turn it over to John. Thank you, John, and good afternoon.

Speaker Change: With our updated and reduced net capital expenditure plan current market dynamics and our view of where we are in the cycle. We believe a disciplined approach to share repurchases as a prudent use of capital at this time.

Spencer Frazier: This concludes my remarks, and I'll now turn it over to Spencer. Thank you, John, and good afternoon. It's a pleasure to be joining the call. My remarks will focus on our sales and marketing strategy, but will also include some perspectives on the market, as well as feedback we are hearing from our customers. During the second quarter, we saw more normalized seasonal patterns across our business. On the demand side, the second quarter felt more like what we're accustomed to seeing prior to the pandemic disrupts. April started a little slower from a demand perspective, primarily due to the time in the Easter, but we did experience what used to be a typical end of month and end of quarter lift in June.

Speaker Change: This concludes my remarks, and I'll now turn it over to Spencer.

Spencer Frazier: Thank you John and good afternoon.

Spencer Frazier: It's a pleasure to be joining the call. My remarks will focus on our sales and marketing strategy, but will also include some perspectives on the market, as well as feedback we are hearing from our customers. During the second quarter, we saw more normalized seasonal patterns across our business. On the demand side, the second quarter felt more like what we're accustomed to seeing, prior to the Pandemic Disruption.

Spencer Frazier: It's a pleasure to be joining the call.

Spencer Frazier: My remarks will focus on our sales and marketing strategy.

Spencer Frazier: Also include some perspectives on the market as.

Spencer Frazier: As well as feedback we're hearing from our customers.

Spencer Frazier: During the second quarter, we saw more normalized seasonal patterns across our business.

Spencer Frazier: On the demand side, the second quarter felt more like what we're accustomed to seeing prior to the pandemic disruption.

Spencer Frazier: April started a little slower from a demand perspective, primarily due to the timing of Easter, but we did experience what used to be a typical end of month and end of quarter lift in June. This was evidenced particularly in both JBI and JVT during the quarter, where we saw strong improvements in bid compliance levels in the mid 80s to 90s, which we haven't seen in quite some time. We were able to meet this seasonal demand for our customers with high service levels across our business. Our customers have worked through most of their excess inventory and feel appropriately right-sized with current sales activity levels.

Spencer Frazier: April started a little slower from a demand perspective, primarily due to the timing of Easter, but we did experience what used to be a typical end of month and end of quarter lift in June.

Spencer Frazier: This was evidenced particularly in both JVI and JVT in the quarter, where we had seen strong improvements in big compliance levels in the mid-80s to 90s levels, which we haven't seen in quite some time. We were able to meet this seasonal demand for our customers with high service levels across our businesses. Our customers have worked through most of their excess inventory and feel appropriately right-sized with current sales activity levels. While we cannot predict when the market will inflect, our customers know we stand ready to meet their growing transportation needs across our entire school services. Regarding our school, our customers buy capacity across our suite of services and have come to expect a consistent, high-service-level experience.

Spencer Frazier: This was evidenced particularly in both JV and JBT in the quarter, where we've seen strong improvements in bid compliance levels in the mid eighty's to ninety's levels, which we haven't seen in quite some time.

Spencer Frazier: We were able to meet this seasonal demand for our customers with high service levels across our businesses.

Spencer Frazier: Our customers have worked through most of their excess inventory and fuel appropriately right sized with current sales activity levels.

Spencer Frazier: While we cannot predict when the market will inflect, our customers know we stand ready to meet their growing transportation needs across our entire scroll of services. Regarding our scroll, our customers by capacity across our suite of services and have come to expect a consistently high service level experience. In fact, greater than 90% of our top 100 customers buy more than one service from us, and greater than 75% buy from three or more services. Among our segments, JBI and ICS have the highest overlap amongst our top 100 customers.

Spencer Frazier: While we cannot predict when the market will inflect, our customers know, we stand ready to meet their growing transportation needs across our entire scroll of services.

Spencer Frazier: Regarding our scroll our customers buying capacity across our suite of services and have come to expect a consistent high service level experience in.

Spencer Frazier: In fact, greater than 90% of our top 100 customers buy more than one service from us, and greater than 75% buy from three or more services. Among our segments, JVI and ICS have the highest overlap among our top 100 customers. We see the power of the scroll in our sales efforts, as customers have recently wanted to de-emphasize their use of brokers in favor of assets. And we've converted some nice wins over to JVT as a result. Being moat and different and offering customers the best solution will always guide our go-to-market strategy. As we look at the overall freight market, we still see oversupply across all modes, with shippers having options on both mode and provider to move their freight.

Spencer Frazier: In fact, greater than 90% of our top 100 customers by more than one service from us and greater than 75% by from three or more services.

Speaker Change: Among our segments J D. In Ics have the highest overlap amongst our top 100 customers.

Spencer Frazier: We see the power of the scroll in our sales efforts as customers have recently wanted to de-emphasize their use of brokers in favor of assets. And we've converted some nice wins over to JVT as a, Being mode indifferent and offering customers the best solution will always guide our go-to-market strategy. As we look at the overall freight market, we still see oversupply across all modes, with shippers having options on both mode and provider to move their freight. Now, while capacity is not a top concern right now, there is an awareness that this will change at some point. But the timing of which, though, remains unclear.

Spencer Frazier: We see the power of this growth in our sales efforts as customers have recently wanted to deemphasize their use of brokers in favor of assets.

Spencer Frazier: And we've converted some nice wins over to JBT as a result.

Being mowed indifferent and offering customers. The best solution, we will always guide or a go to market strategy.

Spencer Frazier: As we look at the overall freight market.

Spencer Frazier: We still see oversupply across all modes with shippers, having options on both mode and provider to move their freight.

Spencer Frazier: Now, while capacity is not a top concern right now, there is an awareness that this will change at some point, but the timing of which, though, remains unclear. Currently, cost and value are the primary differentiators right now for customers. And we continue to lean into the value we can deliver to customers with our premium service. As we have said in previous quarters, we don't know when the cycle will shift and aren't going to make a prediction, but we remain committed to investing in our business for the long term and being ready to grow with our customers over many years to solve their transportation needs with the high service levels they've come to expect from JVHUD.

Spencer Frazier: Now while capacity is not a top concern right now there is an awareness that this will change at some point.

Spencer Frazier: The timing of which though remains unclear.

Spencer Frazier: Currently, cost and value are the primary differentiators right now for customers, and we continue to lean into the value we can deliver to customers with our premium service. As we have said in previous quarters, we don't know when the cycle will shift and aren't going to make a prediction. But we remain committed to investing in our business for the long term and being ready to grow with our customers over many years to solve their transportation needs with the high service levels they've come to expect from J. B. I'll wrap up with some of the feedback we're getting regarding peak season.

Currently cost and value are the primary differentiators right now for customers.

Spencer Frazier: And we continue to lean into the value, we can deliver to customers with our premium service.

Spencer Frazier: As we have said in previous quarters, we don't know when the cycle will shift and aren't going to make a prediction.

Spencer Frazier: But we remain committed to investing in our business for the long term and being ready to grow with our customers over many years to solve their transportation needs with high service levels, they've come to expect from J B Hunt.

Spencer Frazier: All wrap up with some of the feedback we're getting regarding peak season. We see the same data sets that most of you track and read the same headlines around what's happening in the ocean freight market. The feedback we hear is an expectation for peak season this year, but the magnitude or length of peak remains to be seen. That said, some customers have pulled a portion of their peak freight forward a couple of months, given the multiple macro factors that could impact the supply chain later this year. This pull forward has created an early peak on the water, but that hasn't translated into domestic inland moves just yet.

Spencer Frazier: I'll wrap up with some of the feedback we're getting regarding peak season.

Spencer Frazier: We see the same data sets that most of you track and read the same headlines around what's happening in the ocean freight market. The feedback we hear is an expectation for peak season this year, but the magnitude or length of the peak remains to be seen. That said, some customers have pulled a portion of their peak freight forward by a couple months, given the multiple macro factors that could impact the supply chain later this year. This pull forward has created an early peak on the water, but that hasn't translated into domestic inland moves just yet.

We see the same datasets that most of you track and read the same headlines around what's happening in the ocean freight market.

Spencer Frazier: The feedback we hear is an expectation for peak season, this year, but the magnitude or length of Pete remains to be seen.

Spencer Frazier: That said some customers have pulled a portion of their peak freight forward a couple of months given the multiple macro factors that could impact the supply chain later this year.

Spencer Frazier: This pull forward has created an early peak on the water, but that hasnt translated into domestic inland moves just yet.

Spencer Frazier: We are working with customers on peak season plans to ensure we have resources properly positioned to meet their transportation.

Spencer Frazier: We are working with customers on peak season plans to ensure we have resources properly positioned to meet their transportation needs. That concludes my remarks, so I would now like to turn the call over to Spencer. Thanks, Spencer, and good afternoon. I'll provide an update on Dedicated, Final Mile Business, and give an update on our Areas of Focus across our operations. I'll start with Dedicated.

Spencer Frazier: We are working with customers on peak season plans to ensure we have resources properly positioned to meet their transportation needs.

Spencer Frazier: That concludes my remarks, so I would now like to turn the call over to Nick.

Thanks, Spencer and good afternoon.

Nick Hobbs: I'll provide an update on dedicated, final mile business and give an update on our areas of focus across our operations. I'll start with dedicated, but we are not immune to the impact of the overall market. We believe our results during the quarter continue to highlight the strength and resiliency of our unique dedicated business model. We believe our differentiation is supported by our focus on providing professional, outsourced, private fleet solutions to a broad and diverse group of customers, in addition to our relentless focus on delivering value into our customers. During the second quarter, we saw 325 trucks of new deals, while we have visibility system losses or downsizing throughout 2024.

I'll provide an update on dedicated final mile business and give an update on our areas of focus across our operations.

Nicholas Hobbs: While we are not immune to the impact of the overall market, we believe our results during the quarter continue to highlight the strength and resiliency of our unique dedicated business model. We believe our differentiation is supported by our focus on providing professional outsourced private fleet solutions to a broad and diverse group of customers, in addition to our relentless focus on delivering value to our customers. During the second quarter, we sold 325 trucks in new deals.

Nick: I'll start with dedicated while we are not immune to the impact of the overall market. We believe our results during the quarter continue to highlight the strength and resiliency of our unique dedicated business model.

Nick: We believe our differentiation is supported by our focus on providing professional outsourced private fleet solutions to a broad and diverse group of customers. In addition to our relentless focus on delivering value to our customers.

Nick: During the second quarter, we sold 325 trucks with new deals, while we have visibility to some losses or downsizing throughout 2024.

Nick Hobbs: Our sales pipeline remains solid, and our team has done well to backfill some of those losses. Despite the challenging market conditions, importantly, we have remained committed to our discipline in the types of deals we underwrite without sacrificing our return thresholds. With a proven track record of hot service level and our ability to create value for our customers, we continue to ask success onboarding new business and renewing business with our existing customers. We remain confident in our ability to execute on the transportation needs of our customers and the opportunities that further compound our growth over many years.

Nicholas Hobbs: While we have visibility to some losses or downsizing throughout 2024, our sales pipeline remains solid, and our team has done well to backfill some of those losses. Despite the challenging market conditions, importantly, we have remained committed to our discipline and the types of deals we underwrite without sacrificing our return threshold. With a proven track record of high service levels and our ability to create value for our customers, we continue to have success onboarding new business and renewing business with our existing customers.

Nick: Our sales pipeline remains solid and our team has done well to backfill some of those losses. Despite the challenging market conditions. Importantly, we have remained committed to our discipline and the types of deals we underwrite without sacrificing our return thresholds.

Nick: With a proven track record of high service levels, and our ability to create value for our customers. We continue to have success on boarding new business and renewing business with our existing customers.

Nicholas Hobbs: We remain confident in our ability to execute on the transportation needs of our customers and the opportunity to further compound our growth over many years. Going forward, despite our strong new truck sales in the first half of the year, I would expect our fleet count to end the year relatively flat from our Q2 levels, with some additional startup expenses as new trucks are brought into the fleet. Shifting to the final mile

Nick: We remain confident in our ability to execute on the transportation needs of our customers and the opportunity to further compound our growth over many years.

Nick Hobbs: Going forward to spot our strong new truck sales in the first half of the year, I would expect our fleet count to end the year relatively flat. From our Q2 levels, with some additional startup expenses as new trucks are brought into the fleet. Shifting the final mile, I continue to be pleased with our progress we have made to improve the overall health of this business. This journey started many years ago as we focused on a differentiated high quality service to then focusing on revenue quality and remaining cost discipline throughout the process. The market for big and bulky delivery continues to evolve, and customers are looking for a high quality, safe and secure service provider with national scale.

Nick: Going forward, despite our strong new truck sales in the first half of the year I would expect our fleet count to end the year relatively flat from our Q2 levels with some additional startup expenses as new trucks are brought into the fleet.

Nick: Shifting to final mile.

Nicholas Hobbs: I continue to be pleased with the progress we have made to improve the overall health of this business. This journey started many years ago as we focused on a differentiated, high-quality service, then focused on revenue quality, and remained cost disciplined throughout the process. The market for big and bulky delivery continues to evolve, and customers are looking for a high-quality, safe, and secure service provider with national scale. For transparency purposes, our second quarter results did include a net benefit of $1.1 million from two offsetting claim settlements.

I continue to be pleased with our progress we have made to improve the overall health of this business. This journey started many years ago as we focused on a differentiated high quality service to them focusing on revenue quality and remaining cost disciplined throughout the process the market for big and bulky delivery continues to evolve and customers are looking.

Nick: For our high quality safe and secure service provider with national scale for transparency purposes. Our second quarter results did include a net benefit of $1 1 million from two offsetting claim settlements.

Nick Hobbs: For transparency purposes, our second quarter results did include a net benefit of 1.1 million from two offsetting claim settlements. The man for big and bulky products remain mixed with stable demand for both appliances and exercise equipment for continued softness and furniture demand. We remain modestly encouraged by our sales pipeline and continue to see new brands engage in discussions with our team. We continue to strive to provide the highest level as we deliver products into the homes of our customers' customer with their focus on being safe and secure. We will remain disciplined with potential new business to ensure appropriate returns for our service while we work to grow the business and improve profitability.

Nicholas Hobbs: Demand for big and bulky products remains mixed, with stable demand for both appliances and exercise equipment but continued softness in furniture demand. We remain modestly encouraged by our sales pipeline and continue to see new brands engage in discussions with our team. We continue to strive to provide the highest level as we deliver products into the homes of our customers' customers with a focus on being safe and secure. We will remain disciplined with potential new business to ensure appropriate returns for our service.

Nick: Demand for big and bulky products remain mixed with stable demand for both appliances and exercise equipment, but continued softness in furniture demand.

Nick: We remain modestly encouraged by our sales pipeline and continue to see new brands engage in discussions with our team. We continue to strive to provide the highest level as we deliver products into the homes of our customers customer with their focus on being safe and secure.

Nick: We will remain disciplined with potential new business to ensure appropriate returns for our service.

Nicholas Hobbs: Well, we work to grow the business and improve profitability. Going forward, we would expect some customer churn as we continue to focus on revenue quality but for margin performance to follow fairly normal seasonal patterns, excluding the unique item called out in the quarter. Similar to the last orders, I'll close with some comments on safety.

Nick: We work to grow the business and improve profitability.

Nick Hobbs: We would expect some customers trying to continue to focus on growing new quality, but for modern performance to follow fairly normal seasonal patterns, excluding the unique item called out in the quarter.

Nick: Going forward, we would expect some customer churn as we continue to focus on revenue quality.

Speaker Change: Foremost to follow a fairly normal seasonal patterns, excluding the unique items called out in the quarter.

Nick Hobbs: Similar to the last quarters, I'll close with some comments on safety. Our company was built on a foundation of safety for not only our people, but also the modern republic. We continue to invest in training and equipment to enhance our already strong safety culture. We continue to lead the industry with our fleet that is now 97% rolled out with inward facing cameras, and we remain on track to be 100% complete by the end of the third quarter. As you may recall, 2023 with our best safety performance on record for DOT, preventable accidents per million miles, and I'm pleased to say with the help of our inward-facing cameras, along with our numerous other innovative safety initiatives, we are seeing further improvements so far.

Speaker Change: Similar to the last orders I'll close with some comments on safety.

Nicholas Hobbs: Our company was built on a foundation of safety for not only our people but also the motoring public, and we continue to invest in training and equipment to enhance our already strong safety culture. We continue to lead the industry with our fleet, which is now over 97% rolled out with inward facing cameras, and we remain on track to be 100% complete by the end of the third quarter. As you may recall, 2023 was our best safety performance on record for DOT preventable accidents per million miles.

Speaker Change: Our company was built on a foundation of safety for not only our people, but also the motoring public and we continue to invest in training and equipment to enhance our already strong safety culture.

We continued to lead the industry with our fleet that is now over 97% rolled out with inward facing cameras and we remain on track to be 100% complete by the end of the third quarter. As you May recall 2023, with our best safety performance on record for D. O T preventable accidents per million miles and I am pleased to say.

Nicholas Hobbs: And I'm pleased to say, with the help of our inward facing cameras, along with our numerous other innovative safety initiatives, we are seeing further improvements so far today. This is a testament to the quality of our drivers and the safety culture of our company. As the cost of claims continues to move up exponentially, we remain focused on finding new, innovative ways to further enhance our safety performance and mitigate risk where possible. This concludes my remarks, so I would like to now turn it over to Darren. Thank you, Nick.

Speaker Change: With the help of our inward facing cameras, along with our numerous other innovative safety initiatives, we're seeing further improvement so far year to date.

Nick Hobbs: This is our year today. This is a testament to the quality of our drivers and the safety culture of our company. As the cost of claims continues to move up exponentially, we remain focused on finding new, innovative ways to further enhance our safety performance and mitigate risk where possible.

Speaker Change: This is a testament to the quality of our drivers and the safety culture of our company as the cost of claims continues to move up exponentially we room.

Speaker Change: <unk> focused on finding new innovative ways to further enhance our safety performance and mitigate risk where possible.

Darren Field: This concludes my remarks, or would like to now turn it over to Darren.

Speaker Change: This concludes my remarks were reluctant now I'll turn it over to Darren.

Darren Field: Thank you, Nick, and thank you to everyone for joining us this afternoon on the call. I'll review the performance of our intermodal business during the quarter, given update on the market and service performance, and highlight the continued opportunity we have to deliver value for our customers and all of our stakeholders. I'll start with intermodal performance overall. While we saw a seasonality that resembled more normalized pre-pandemic demand trends during the quarter, the impact of a depressed truckload market and competitive business season in general more than offset this and drove our volume down 1% year over year.

Darren P. Field: And thank you to everyone for joining us this afternoon on the call. I'll review the performance of our intermodal business during the quarter, give an update on the market and service performance, and highlight the continued opportunity we have to deliver value for our customers and all of our stakeholders. I'll start with Intermodal's performance.

Darren: Thank you Nick and thank you to everyone for joining us. This afternoon on the call I'll review the performance of our intermodal business during the quarter given update on the market and service performance and highlight the continued opportunity we have to deliver value for our customers and all of our stakeholders.

Darren P. Field: Overall, while we saw seasonality that resembled more normalized pre-pandemic demand trends during the quarter, the impact of a depressed truckload market and a competitive bid season, in general, more than offset this and drove our volume down 1% year over year. This was primarily driven in the east, where we compete more directly with one-way truckload, where our volumes were down 7% in the quarter. This was partially offset by our TransCon business growing 4% in the quarter.

Darren: I'll start with intermodal performance overall, while we saw seasonality that resembled more normalized pre pandemic demand trends during the quarter the impact of a depressed truckload market and competitive bid season in general more than offset this and drove our volume down one.

Darren: <unk> year over year.

Darren Field: This was primarily driven in the east where we compete more directly with one way truckload, where our volumes were down 7% in the quarter. This was partially offset by our trans cod business growing 4% in the quarter. We continue to see strong demand out of Southern California, where volumes were up double digits versus the prior year. By month, our consolidated volumes were down 3% in April, up 1% in May, and down 1% in June. During June, we did see a nice seasonal lift in volume, particularly toward the end of the month, and importantly, we were able to meet our customers' capacity needs with strong service levels, highlighting the strength and flexibility of our network.

Darren: This was primarily driven in the east where we compete more directly with one way truckload, where our volumes were down 7% in the quarter. This was partially offset by our transcon business growing 4% in the quarter. We continued to see strong demand out of southern California, where vol.

Darren P. Field: We continued to see strong demand out of Southern California, where volumes were up double digits versus the prior year. By month, our consolidated volumes were down 3% in April, up 1% in May, and down 1% in June.

Darren: <unk> were up double digits versus the prior year.

Darren: Nine months, our consolidated volumes were down 3% in April up 1% in May and down 1% in June during June we did see a nice seasonal lift in volume, particularly towards the end of the month and importantly, we were able to meet our customers' capacity needs.

Darren P. Field: During June, we did see a nice seasonal lift in volume, particularly toward the end of the month, and importantly, we were able to meet our customers' capacity needs with strong service levels, highlighting the strength and flexibility of our network. As we look at the freight market, we continue to see a large amount of freight that we believe should be converted from over-the-road to intermodal as it is more economical and environmentally friendly.

Darren: <unk> was strong service levels, highlighting the strength and flexibility of our network as we look at the freight market. We continue to see a large amount of freight that we believe should be converted from over the road to intermodal as it is more economical and environmentally friendly as I've said, it before and I want to say it again.

Darren Field: As we looked at the freight market, we continue to see a large amount of freight that we believe should be converted from over the road to intermodal, as it is more economical and environmentally friendly. As I've said it before, and I want to say it again, we stand ready and have the capacity and people in place to meet and exceed our customer service needs and recapture share from the highway moving forward. During the quarter, we did see margin pressure both year over year and sequentially. This is largely related to market pressure on our yields but also due to our capacity investments.

Darren P. Field: As I've said it before, and I want to say it again, we stand ready and have the capacity and people in place to meet and exceed our customer service needs and recapture share from the highway moving forward. During the quarter, we did see margin pressure both year-over-year and sequentially.

Darren: Again, we stand ready and have the capacity and people in place to meet and exceed our customer service needs and recapture share from the highway moving forward <unk>.

Speaker Change: During the quarter, we did see margin pressure both year over year and sequentially. This is largely related to the market pressure on our yields but also due to our capacity investments while volume does mean more to us now than ever before given our underutilized capacity are modestly lower volume.

Darren P. Field: This was largely related to market pressure on our yields, but also due to our capacity investment. Volume does mean more to us now than ever before, given our underutilized capacity, but our modestly lower volume year-over-year and only slightly higher volume sequentially weren't enough to absorb our higher cost and deflationary yield pressure. As discussed earlier in the year, the bid season was competitive and largely wrapped up during the second quarter.

Darren Field: While volume does mean more to us now than ever before, given our underutilized capacity. Our modestly lower volume year over year and only slightly higher volume sequentially wasn't enough to absorb our higher cost and deflationary yield pressure. As discussed earlier in the year, bid season was competitive and largely wrapped up during the second quarter. We continue to see truckload pricing that we believe is unsustainable, particularly in the east, and shippers took advantage. Given the nature of our pricing cycle, we will be living with a large portion of the recently completed bid into the first half of 2025.

Darren: Year over year, and only slightly higher volumes sequentially wasn't enough to absorb our higher cost and deflationary yield pressure.

Darren: As discussed earlier in the year bid season was competitive and largely wrapped up during the second quarter. We continued to see truckload pricing that we believe is unsustainable, particularly in the east and shippers took advantage given the nature of our pricing cycle, we will be living with a large pool.

Darren P. Field: We continue to see truckload pricing that we believe is unsustainable, particularly in the east, and shippers took advantage. Given the nature of our pricing cycle, we will be living with a large portion of the recently completed bids into the first half of 2025. With regard to our rail service providers, we have been pleased with the service from each of our providers, their commitment to the intermodal offering, and growing the overall market.

Darren: <unk> of the recently completed bids into the first half of 2025.

Darren Field: With regard to our rail service providers, we have been pleased with the service from each of our providers, their commitment to the intermodal offering and growing the overall market. That said, we in our railroad partners know the true test of our collective service will come once freight volumes increase. We have been pleased with higher overall demand on our networks. We remain confident in the collaborative work and investments being made to maintain high service levels as the inflection occurs. In closing, we continue to strongly believe in the strength of our intermodal franchise. Our customers trust us, and we continue to find new and innovative ways to better serve their transportation needs.

Darren: With regard to our rail service providers, we have been pleased with the service from each of our providers their commitment to the intermodal offering and growing the overall market that said, we in our rail road partners know the true test of our collective service will come once freight volumes increase with higher <unk>.

Darren P. Field: That said, we and our railroad partners know the true test of our collective service will come once freight volumes increase with higher overall demand on our networks. We remain confident in the collaborative work and investments being made to maintain high service levels as the inflection occurs. In closing, we continue to strongly believe in the strength of our intermodal franchise.

Darren: Overall demand on our networks, we remain confident in the collaborative work and investments being made to maintain high service levels as the inflection occurs.

Darren: In closing we continue to strongly believe in the strength of our intermodal franchise, our customers Trust us and we continue to find new and innovative ways to better serve their transportation needs. Our service levels are exceptional and we are confident that this level of service can continue as.

Darren P. Field: Our customers trust us, and we continue to find new and innovative ways to better serve their transportation needs. Our service levels are exceptional, and we are confident that this level of service can continue as our customers' overall demand for our capacity increases. While we are not pleased with our current results, our optimism about the future growth of our business hasn't changed. We remain excited to work with our customers to meet their growing demand with an efficient, cost-competitive, and more environmentally-friendly service. That concludes my prepared remarks, and I'll turn it over to Brad Hicks. Thank you, Darren, and good afternoon, everyone.

Darren Field: Our service levels are exceptional, and we are confident that this level of service can continue as our customers' overall demand for our capacity increases. While we are not pleased with our current results, our optimism on the future growth of our business hasn't changed. We remain excited to work with our customers to meet their growing demand with an efficient, cost-competitive, and more environmentally friendly solution.

Darren: Our customers overall demand for our capacity increases.

Darren: While we are not pleased with our current results our optimism on the future growth of our business Hasnt changed we remain excited to work with our customers to meet their growing demand with an efficient cost competitive and more environmentally friendly solution.

Brad Hicks: That concludes my prepared remarks, and I'll turn it over to Brad X. Thank you, Darren, and good afternoon, everyone. I'll review the performance of our integrated capacity solutions and truckload segments while also providing an update on some of our work in JVN360. Starting with ICS, the overall brokerage environment remains competitive, with pressure on both volume and rate. Segment gross revenue declined 21% year-over-year in the second quarter, driven by a 25% decline in volume, partially offset by a 5% increase in revenue per load. As you have heard, we did see some seasonality in the business with some relative tightness in the market around road checks and in the later part of June.

Darren: That concludes my prepared remarks, and I'll turn it over Brad Hicks.

Bradley W. Hicks: Thank you Darren and good afternoon, everyone.

Bradley W. Hicks: I'll review the performance of our integrated capacity solutions and truckload segments while also providing an update on some of our work in J.B. Hunt's research, starting with ITS. The overall brokerage environment remains competitive, with pressure on both volume and rate. Segment Gross Revenue declined 21% year-over-year in the second quarter, driven by a 25% decline in volatility, partially offset by a 5% increase in revenue per load.

Bradley W. Hicks: I'll review the performance of our integrated capacity solutions and truckload segments, while also providing an update on some of our work in JV on $3 60.

Bradley W. Hicks: Starting with Ics, the overall brokerage environment remains competitive with pressure on both volume and rate.

Bradley W. Hicks: Segment gross revenue declined 21% year over year in the second quarter, driven by a 25% decline in volume.

Bradley W. Hicks: Partially offset by a 5% increase in revenue per load.

Bradley W. Hicks: As you have heard, we did see some seasonality in the business with some relative tightness in the market around road checks and in the latter part of. That said, our growth margins for the quarter were 14.8%, the highest we've seen since the fourth quarter of 2020, which is noteworthy given 61% of our volumes are under contract. We continue to focus on quality revenue and growing with the right customers, as our yield performance indicates.

As you have heard we did see some seasonality in the business with some relative tightness in the market around road check and in the later part of June.

Brad Hicks: That said, our gross margins for the quarter were 14.8%, the highest we've seen since the fourth quarter of 2022, which is noteworthy given 61% of our volumes are under contract. We continue to focus on quality revenue and growing with the right customers as our yield performance indicates. Admittedly, we are incurring some challenges integrating the previously announced acquisition of BNSF Logistics of remain encouraged and optimistic about the potential of the agent model on our platform. These challenges are masking some of the underlying progress we are seeing in our legacy ICS business. Going forward, we will remain focused on further right sizing our cost structure, but ultimately, we need to push more volume through our platform in order to see material improvements in our results.

Bradley W. Hicks: That said, our gross margins for the quarter were 14, 8% the highest we've seen since the fourth quarter of 2022.

Bradley W. Hicks: This is noteworthy given 61% of our volumes are under contract.

Bradley W. Hicks: We continue to focus on quality revenue and growing with the right customers as our yield performance indicates.

Bradley W. Hicks: Admittedly, we are incurring some challenges integrating the previously announced acquisition of BNSF logistics, but we remain encouraged and optimistic about the potential of the agent model on our platform. These challenges are masking some of the underlying progress we are seeing in our legacy ICS business. Going forward, we will remain focused on further right-sizing our cost structure, but ultimately, we need to push more volume through our platform in order to see material improvements in our results. Moving over to JVT or truckload, segment gross revenue was down 12% year over year.

Bradley W. Hicks: Admittedly, we are incurring some challenges integrating the previously announced acquisition of BNS F logistics.

Bradley W. Hicks: But remain encouraged and optimistic about the potential of the agent model on our platform.

Bradley W. Hicks: These challenges are masking some of the underlying progress we are seeing in our legacy ICF business.

Going forward, we will remain focused on further right sizing our cost structure.

Bradley W. Hicks: But ultimately we need to push more volume through our platform in order to see material improvements in our results.

Brad Hicks: Moving over to JVT or truck load, segment gross revenue was down 12% year-over-year, driven by a 9% decrease in volume and a 4% decrease in revenue per load. This season was competitive, and we opted to remain disciplined on price, which resulted in some lost buy. That said, we are focused on attracting the right freight that best fits our network with the right customers that see the value of our service and network of trailing capacity. While we currently have access trailing capacity in our network, we are working on ensuring discipline around our network to ensure we have the right capacity in the right markets where our customers have needs and where they are growing.

Speaker Change: Moving over to JBT our truckload.

Speaker Change: Segment gross revenue was down 12% year over year.

Bradley W. Hicks: This was driven by a 9% decrease in volume and a 4% decrease in revenue per load. This season was competitive, and we opted to remain disciplined on price, which resulted in some lost volume. That said, we are focused on attracting the right freight that best fits our network with the right customers, who see the value of our service and network of trailing capacity. While we currently have excess trailing capacity in our network, we are working on ensuring discipline around our network to ensure that we have the right capacity in the right markets where our customers have needs and where they are growing. We hear from customers that they appreciate our high service levels and the flexibility that our drop trailer offering provides in their supply chain.

Speaker Change: Driven by a 9% decrease in volume and a 4% decrease in revenue per load.

Speaker Change: Bid season was competitive and we opted to remain disciplined on price.

Speaker Change: Which resulted in some lost volume.

Speaker Change: That said, we are focused on attracting the right freight that best fits our network with the right customers that see the value of our service and network of trailing capacity.

Speaker Change: While we currently have excess trailing capacity in our network. We are working on ensuring discipline around our network to ensure that we have the right capacity in the right markets, where our customers have needs and where they are growing.

Brad Hicks: We hear from customers that they appreciate our high service levels and the flexibility that our drop trailer offering provides to their supply chains. Our model allows us to be more variable with our cost depending on the market, which we believe ultimately presents us with the opportunity to scale this cost competitive service offering for customers while ensuring we generate an appropriate return on capital. Going forward, our focus is on proving our trailer utilization rate while ensuring our capacity remains balanced across the network.

Speaker Change: We hear from customers that they appreciate our high service levels and the flexibility that our drop trailer offering provides to their supply chain.

Bradley W. Hicks: Our model allows us to be more variable with our costs depending on the market, which we believe ultimately presents us with an opportunity to scale this cost-competitive service offering for customers, while ensuring we generate an appropriate return on capital. Going forward, our focus is on improving our trailer utilization rate, while ensuring our capacity remains balanced across the nation. I'll close with some comments on J.B. Hunt 360.

Speaker Change: Our model allows us to be more variable with our cost depending on the market, which we believe ultimately presents us with opportunity to scale. This cost competitive service offering for customers, while ensuring we generate an appropriate return on capital.

Speaker Change: Going forward, our focus is on improving our trailer utilization rate, while ensuring our capacity remains balanced across the network.

Brad Hicks: I'll close with some comments on JD Hunt 360. Technology enables our people, helps drive productivity, and also drives efficiency and how we source and serve customers with our available capacity. Technology is foundational to our company, but it's also created opportunities for strategic step groups to impact our operations. We continue to deploy enhancements to our system to increase the security of our platform and have become much more stringent on carrier vetting to mitigate cargo theft risk, which continues to be very prevalent in the industry and, in particular, for our customers who are feeling the impact. Long-term technology investments will continue to drive productivity and efficiency gains across the scroll and better position us for long-term growth with our customers.

Speaker Change: I'll close with some comments on J B Hunt 360.

Bradley W. Hicks: Technology enables our people, helps drive productivity, and also drives efficiency and how we source and serve customers with our available capacity. Technology is foundational to our company, but it's also created opportunities for strategic theft groups to impact our operations. We will continue to deploy enhancements to our system to increase the security of our platform and have become much more stringent on carrier vetting to mitigate cargo smuggling, which continues to be very prevalent in the industry and in particular for our customers who are feeling the impact.

Speaker Change: Technology enables our people helps.

Speaker Change: Helps drive productivity and also drives efficiency and how we source and serve customers with our available capacity.

Speaker Change: Technology is foundational to our company, but it also created opportunities for strategic theft groups to impact our operations.

We continue to deploy enhancements to our system to increase the security of our platform and have become much more stringent on carrier vetting to mitigate cargo theft risk, which continues to be very prevalent in the industry and in particular for our customers who are feeling the impact.

Bradley W. Hicks: Long-term technology investments will continue to drive productivity and efficiency gains across the scroll and better position us for long-term growth with our. That concludes my comments, so I'll turn it back to the operator, who will open the call for questions. Thank you. And we will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the conversation. If you would like to withdraw your question, simply press star 1 a second time. If you are called upon to ask your question and are listening via speakerphone on your device, please pick up your handset and ensure that your phone is not on mute when asking your questions.

Speaker Change: Long term technology investments will continue to drive productivity and efficiency gains across the scroll and better position us for long term growth with our customers.

Unknown Executive: That concludes my comments, so I'll turn it back to the operator, who will open the call for questions.

Speaker Change: That concludes my comments, so I'll turn it back to the operator, who will open the call for questions.

Speaker Change: Okay.

Unknown Executive: Thank you, and we will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one a second time.

Speaker Change: Thank you.

Speaker Change: And we will now begin the question and answer session.

If you have dialed in and we would like to ask a question. Please press star one on your telephone keypad to raise your hand and join the queue.

Speaker Change: I would like to withdraw your question simply press Star one a second time.

Unknown Executive: If you are called upon to ask your question and are listening via speakerphone on your device, please pick up your handset and ensure that your phone is not on mute when asking your question.

Speaker Change: If you are called upon to ask your question and our listening via speakerphone on your device.

Speaker Change: These pickup your handset and ensure that your phone is not on mute when asking your question.

Unknown Executive: In order to take as many questions as possible, we do ask that you please limit yourself to one question. Again, it is star one if you would like to join the queue.

Speaker Change: In order to take as many questions as possible. We do ask that you. Please limit yourself to one question.

Speaker Change: Again, it is star one if you would like to join the queue.

John Chapel: And your first question comes from the line of John Chapel with Evercore ISI. Your line is open.

Operator: In order to take as many questions as possible, we do ask that you please limit yourself to one question. Again, it is star one if you would like to join the queue. And your first question comes from the line of John Chappell with Evercore ISI. Your line is open. Thank you. Good afternoon.

Speaker Change: And your first question comes from the line of Jon Chappell with Evercore ISI. Your line is open.

Speaker Change: Okay.

John Chapel: Thank you. Good afternoon.

Jonathan B. Chappell: Darren, you mentioned a pickup near the end of June on some of the volumes. Just wondering, does that have to do with some of the themes that Spencer spoke about regarding maybe moving up peak season a little bit? Or is there something else going on, particularly in the transcontinent in Southern California, that gives you a little bit more optimism about the cycle? Yeah, appreciate the question.

Jonathan B. Chappell: Thank you good afternoon.

Darren Field: Darren, you mentioned to pick up near the end of June on some of the volumes. Just wondering, does that have to do with some of the themes that the Spencer spoke about regarding moving up peak season a little bit, or is there something else going on, particularly in the Transcon in Southern California, that gives you a little bit more optimism about the cycle? Yeah, I appreciate the question. Certainly, Spencer's comments just on overall imports through Southern California is one of many factors resulting in just a general improving trends throughout the first quarter or throughout that second quarter.

Jonathan B. Chappell: Darren you mentioned a pick up near the end of June on some of the volumes. Just wondering does that have to do with some of the themes expenses spoke about regarding maybe moving up a peak season, a little bit or is there something else going on particularly on the transcon in southern California that gives you a little bit more optimism about the cycle.

Darren P. Field: Certainly, Spencer's comments just on overall imports through Southern California are one of many factors resulting in just a general improving trend throughout the first quarter or throughout that second quarter. I do want to highlight, you know, we referenced a negative 1% volume comp in June. June of 23 had two more working days than June of 24, and so that's certainly an influencer in that comparison.

Yes, I appreciate the question certainly Spencer's comments just on <unk>.

Speaker Change: Overall imports through southern California is one of many factors, resulting in just the general <unk>.

Speaker Change: Improving trends throughout the first quarter or throughout the second quarter.

Darren Field: I do want to highlight, you know, we referenced a negative 1% volume comp in June. June of '23 had two more working days than June of '24, and so that's certainly an influencer in that comparison. But again, as the quarter went on, we experienced some improving trends from our customers. I also highlighted in the prepared comments that we were up double digits out of Southern California for the entirety of the second quarter. So certainly some customers would highlight that maybe that was a result of early shipments for peak season. Some customers highlighted that generally their business had improved.

Speaker Change: I do want to highlight we referenced.

Speaker Change: I gave 1% volume comp in June June of 'twenty, three had two more working days in June of 'twenty, four and so that's certainly an influencer in that comparison, but again as the quarter went on we.

Darren P. Field: But again, as the quarter went on, we experienced some problems and some improving trends from our customers. I also highlighted in the prepared comments that we were up double digits out of Southern California for the entirety of the second quarter.

Some.

Some improving trends from our from our customers I also highlighted in the prepared comments that we were up double digits out of southern California for the entirety of the second quarter. So certainly.

Darren P. Field: So certainly, some customers would highlight that maybe that was a result of early shipments for peak season. Some customers highlighted that, generally, their business had improved. And in some cases, we had converted back highway business to intermodal. So it's kind of a mash of everything to see some improvements that occurred during the quarter. Yeah, and John, this is Spencer.

Speaker Change: Some customers would highlight that maybe that was a result of <unk>.

Speaker Change: Early shipments for peak season, some customers highlighted the generally their business had improved and in some cases, we had converted back highway business to intermodal. So it's kind of a.

Darren Field: And in some cases, we had converted back highway business to remote. So it's kind of a mash of everything to see some improvements that occurred during the quarter.

Speaker Change: Our math shows everything.

Speaker Change: To see some improvements that occurred during the quarter.

Spencer Frazier: Yeah, and hey, John, this is Spencer. I just like to add a little bit to that. When I talk about normal seasonal trends, I think that's something that we really need to think about across our customer base. Normal seasonal trends in the month and a quarter in Q2 really are related to back to school. Things that are prepping for that season, for other events that take place here in July with different promotional things. So I'm encouraged from our customer base that really normal seasonality started to show up for us. And I think that's something that we're going to be looking forward to as we move on.

Spencer Frazier: I'd just like to add a little bit to that. When I talk about normal seasonal trends, I think that's something that we really need to think about across our customer base. Normal seasonal trends, end of month, end of quarter, and Q2 really are related to back to school, things that are preparing for that season, and other events that take place here in July with different promotional things.

Spencer Frazier: Yeah, Hey, John This is Spencer I, just like to add a little bit to that when I talk about normal seasonal trends I think that's something that we really need to think about across our customer base normal seasonal trends and a month end of quarter in Q2 really are related to the back to school.

Spencer Frazier: Things that are prepping for that season for other events that take place here in July with different promotional things.

Spencer Frazier: So I'm encouraged from our customer base that really normal seasonality has started to show up for us, and I think that's something that we're going to be looking forward to as we move on. I think that in previous years, we really struggled with seeing seasonal trends in a normal way. There was just still so much disruption. So I appreciate the question; I just wanted to add those comments. And your next question comes from the line of Jordan Alliger with Goldman Sachs. Your line is open. Yeah, hi, afternoon.

Spencer Frazier: So I'm encouraged from our customer base that really normal seasonality started to show up for us.

Spencer Frazier: I think that's something that we're going to be looking forward to as we.

Spencer Frazier: I think that in the prior years, we struggle really with seeing seasonal trends in a normal way. There was just still so much disruption. So I appreciate the question. Just wanted to add those comments.

Spencer Frazier: Moving on I think that in the prior years, we struggled really were seeing seasonal trends in a normal way there was just still so much disruption so.

Spencer Frazier: I appreciate the question just wanted to add those comments.

Spencer Frazier: Yeah.

Jordan Allegor: And your next question comes from the line of Jordan Allegor with Goldman Sachs. Your line is open. Yeah, hi afternoon. So just I know you've talked about this a bunch before the intermodal margin recovery story. I know you have the excess capacity now, but is it mostly a function of getting sequential revenue to move up? And do you feel, given now that the contract season is largely done for the next several quarters, at least looking ahead? Do you feel you've reached a point of stability on that revenue to promote? Thanks.

Jordan Robert Alliger: And your next question comes from the line of Jordan <unk> with Goldman Sachs. Your line is open.

Jordan Robert Alliger: So I know you've talked about this a bunch before the intermodal margin recovery story, but I know you have the excess capacity now, but is it mostly a function of getting sequential revenue per load to move up? And do you feel given now that the contract season is largely done?

Hi afternoon.

Speaker Change: So just I know you've talked about this a bunch before the intermodal margin recovery story I know you have the excess capacity now but is it mostly a function of getting sequential revenue per load to move up and do you feel given now that the contract season is largely done.

Darren P. Field: For the next several quarters, at least looking ahead, do you feel you've reached a point of stability on that revenue per load thing? Well, certainly, we highlighted that this current, what I'll call the 2024 bid cycle, largely completed during the second quarter. Those prices and the yields that we achieved were not strong enough to give us the margin improvement that we believe our system can and should run.

Speaker Change: For the next several quarters at least looking ahead do.

Speaker Change: Do you feel you've reached a point of stability on that revenue per load.

Darren Field: Well, certainly we highlighted that this current, what I'll call the 2024 bid cycle, largely completed during the second quarter. Those prices and the yields that we achieved were not strong enough to give us margin improvement that we believe our system can and should run. We're not changing our long-term margin target, where we're not satisfied with the current returns on our business and do recognize that pricing improvement is one of a couple of areas, but the most important area in order to get margin improvement. Certainly, volume is worth more to us today than ever before. We've said that quite often.

Yeah.

Speaker Change: Well certainly we highlighted that.

Speaker Change: This current what I'll call. The 2020 for a bid cycle largely completed during the second quarter.

Speaker Change: Those prices in the yields that we achieved were not.

Speaker Change: <unk> strong enough to give us margin improvement that we believe.

Speaker Change: Our system can and should run we're not changing our long term margin target.

Darren P. Field: We're not changing our long-term margin target. We're not satisfied with the current returns on our business and do recognize that pricing improvement is one of a couple of areas but the most important area in order to get margin improvement. Certainly, volume is worth more to us today than ever before. We've said that quite often, and that's just a result of having as much underutilized equipment as we currently have. And then, all things cost money.

Speaker Change: We're not satisfied with the current returns on our business and do recognize that.

Speaker Change: Pricing improvement is is one of a couple of areas, but the most important area in order to get margin improvement certainly volume is worth more to us today than ever before we've said that quite often and thats. Just a result of having as much underutilized equipment as as we can.

Chris Weatherby: And that's just a result of having as much underutilized equipment as we currently have. And then all things cost. What can we do to be more efficient as an organization? That can be inside the activities of our drivers and our drainage operation. That can be certainly inside the activities of our people. How do we utilize technology better? How can we just be more efficient with our customers? But over the long term, pricing will always be the most valuable element to improving margins. More than volume or just operational efficiency. But we will work on all three every day.

Darren P. Field: You know, what can we do to be more efficient as an organization? That can be in the activities of our drivers and our drainage operation. That can certainly be in the activities of our people. How do we utilize technology better?

Speaker Change: Currently happened then all things cost what can we do to be more efficient as an organization that can be inside the activities of our drivers and our drayage operation that can be certainly inside the activities of our people how do we utilize technology better how can we just be more efficient.

Speaker Change: Ishant with with our customers, but over the long term pricing will always be the most valuable element to improving margins more than volume or just operational efficiency, but we will work on all three everyday.

Darren P. Field: How can we just be more efficient with our customers? But over the long term, pricing will always be the most valuable element to improving margins more than volume or just operational efficiency. But we will work on all three every day. And your next question comes from the line of Chris Wetherbee with Wells Fargo. Your line is open.

Okay.

Chris Weatherby: And your next question comes from the line of Chris Weatherby with Wells Fargo. Your line is open. Any thanks.

Speaker Change: And your next question comes from the line of Chris Wetherbee with Wells Fargo. Your line is open.

Christian F. Wetherbee: Hey, thanks. Good afternoon, guys. I guess I wanted to touch a little bit on that margin comment. I guess we saw volume up sequentially, and I know yields were going down, but we also saw profit down sequentially. So, I guess, from a seasonal perspective, that doesn't necessarily always show up.

Christian F. Wetherbee: Hey, Thanks, good afternoon guys.

Chris Weatherby: Good afternoon, guys. I guess I wanted to touch a little bit on that margin comment. I guess we saw volume up sequentially. And I know yields were going down. But we also saw profit down sequentially. So I guess you know, from a seasonal perspective, that doesn't necessarily always show up. So I guess I just want to make sure I understand from a cost perspective. If there was something incrementally you were dealing with this quarter. It's the kind of thing that we see improvement in volume from here. Should we be able to see margin or operating profit improvements sequentially from here?

Christian F. Wetherbee: I guess I wanted to touch a little bit on that margin comment I guess, we saw volume up sequentially and I know yields were going down, but we also saw profit down sequentially. So I guess from a seasonal perspective that doesn't necessarily always show up so I guess I just want to make sure I understand from a cost perspective, if there was something Inc.

Speaker Change: <unk> you were dealing with this quarter or if the kind of thing that we see improvement in volume from here should we be able to see margin or operating profit improvement sequentially from here.

Darren P. Field: So I guess I just want to make sure I understand, from a cost perspective, if there was something incremental you were dealing with this quarter, if it's the kind of thing that we see improvement in volume from here, should we be able to see margin or operating profit improvement sequentially from here? It's really a pricing implementation element is probably the largest driving factor behind the non-normal seasonal sequential change in profitability.

Christian F. Wetherbee: Yeah.

Darren Field: It's really a pricing implementation element. It's probably the largest driving factor behind the non-normal seasonal sequential change in profitability. Certainly, the implementation of the bed cycle has been a headwind to seeing earnings improve. The pricing will always lag volume, and so as we find our way through the rest of the year and look for opportunities to grow our business, we believe over the long term, certainly pricing improvements will lag that volume.

Speaker Change: It's really a pricing implementation element is probably the largest driving factor behind.

Speaker Change: The non normal seasonal sequential change in profitability certainly.

Speaker Change: The implementation of the bid cycle has been a headwind to seeing earnings improve.

Darren P. Field: Certainly, the implementation of the bid cycle has been a headwind to seeing earnings improve. As we have said often, volume will be our leading indicator, and pricing will always lag volume. And so as we find our way through the rest of the year and look for opportunities to grow our business, we believe over the long term, certainly, pricing improvements will lag that volume. And your next question comes from the Scott Group with Wolf Research. Your line is open. Hey, thanks for joining me this afternoon.

Speaker Change: We will say it often volume will be our leading indicators and pricing will always lag volume and so as we we find our way through the rest of the year and look for opportunities to grow our business.

Speaker Change: We believe over the long term certainly pricing improvements will lag that volume.

Speaker Change: Okay.

Scott Group: And your next question comes from the line of Scott Group, which will research. Your line is open. Hey, thanks Afternoon. So I know you don't like to give too much in the way of quarterly guidance, but maybe it would just be helpful to get expectations in a reasonable place at some point. But, so as we see the full impact of these bids, Darren, do you think we should expect one more quarter of sort of a sequential step down and red for load and margin. So that's like near term and then just longer term, bigger picture right, and prior downturns, we've seen you guys take share and that really sets you up for the next cycle of earnings growth going forward.

Speaker Change: And your next question comes from the line of Scott Group with Wolfe Research. Your line is open.

Scott H. Group: So I know you don't like to give too much in the way of quarterly guidance, but maybe it'd just be helpful to get expectations in a reasonable place at some point. But so, as we see the full impact of these bids, Garrett, do you think we should expect one more quarter of sort of a sequential step down in rev per load and margin? So that's the near term.

Scott H. Group: Hey, Thanks afternoon. So I know you don't like to give too much in the way of quarterly guidance, but maybe it'd just be helpful to get expectations in.

Darren: A reasonable place at some point, but so as we see the full impact of these beds. Darren do you think we should expect one more quarter of sort of a sequential step down in Rev per load in margin. So that's like near term and then just longer term bigger picture right in prior downturns we've.

Darren P. Field: And then just longer term, bigger picture, right? In prior downturns, we've seen you guys take share, and that really sets you up for the next cycle of earnings growth going forward. We're not seeing that this time.

Speaker Change: The new guys take share and that really sets you up for the next cycle of earnings growth going forward, we're not seeing that this time and I guess I'm wondering if you have thoughts on why and if you think that if we should what implications you think that has for the next up cycle.

Scott Group: We're not seeing that this time, and I guess I'm wondering if you have thoughts on why, and if you think that if we should, what implications do you think that has for the next up cycle?

Darren P. Field: And I guess I'm wondering if you have thoughts on why and what implications you think that has for the next. So listen, Scott, there's a lot in your question there, certainly. The bid cycle has always been implemented at the same cadence that it did this year.

Speaker Change: Yeah.

Scott Group: So listen, Scott, there's a lot in your question there. Certainly, the bid cycle has always implemented at the same cadence that it did this year. We implement portions, big chunks, 30% call it, of this pricing cycle throughout the second quarter. So I guess you could expect that something after the second quarter would entail all of that fully implemented. So, over time, I mean that we did have negative pricing pressure. I don't have any guidance for you in terms of big step downs. There's certainly a don't anticipate anything like that, but we're certainly getting everything fully implemented throughout the second quarter.

Speaker Change: So listen Scott there was a lot in your question there.

Certainly.

Speaker Change: The bid cycle has always implemented at the same cadence that it did this year.

Darren P. Field: We implemented portions, big chunks, 30%, call it that, of this pricing cycle throughout the second quarter. So I guess you could expect that something after the second quarter would entail all of that fully implemented. So over time, I mean, we did have negative pricing pressure. But I don't have any guidance for you in terms of big step downs.

Speaker Change: We implement.

Speaker Change: Portions big Big chunks, 30% call. It of this pricing cycle throughout the second quarter. So I guess you could expect that.

Speaker Change: Something after the second quarter would would entail all of that fully implemented. So so over time I mean, we did have negative pricing pressure I don't I don't have any guidance for you in terms of big step Downs. There is certainly I don't anticipate anything like that but we're certainly.

Darren P. Field: There's certainly, I don't anticipate anything like that, but we're certainly getting everything fully implemented throughout the second quarter. And so the third quarter is a better reflection of the fully implemented pricing cycle. In terms of share gain, I mean, we have, I think, are dominating the transcom, transcom marketplace. I do believe our volume growth there has been substantial. And we've highlighted that in the east, we have some significant headwinds from truckload pricing.

Speaker Change: Getting everything fully implemented throughout the second quarter and so the third quarter is a better reflection of the fully implemented pricing cycle in terms of of share gains.

Darren Field: And so the third quarter is a better reflection of the fully implemented pricing cycle in terms of share gains. I mean, we have, I think, are dominating the transcon marketplace. I do believe our volume growth there has been substantial, and we've highlighted that in the East, we have some significant headwinds from truckload pricing. I think that as we get into the second half of this year, we are optimistic about the discussions we're having with our customers, about the value proposition that we represent, as well as concerns about highway capacity, and we will continue to look to grow.

Speaker Change: I mean, we have.

Speaker Change: <unk> are dominating the transcon transcon marketplace I do believe our volume growth there has been substantial and we've highlighted that in in the east we have.

Speaker Change: We have some significant headwinds from truckload pricing.

Darren P. Field: I think that as we get into the second half of this year, we are optimistic about the discussions we're having with our customers about the value proposition that we represent, as well as concerns about highway capacity, and we will continue to look to grow. So that's probably all I have to comment on your questions today. And your next question comes from Daniel Imbrough with Stevens. Your line is open.

Speaker Change: I think that as.

Speaker Change: As we get into the second half of this year, we are optimistic about the discussions we're having with our customers about the value proposition that we represent as well as concerns about highway capacity and we will continue to look to grow. So that's probably all I have to comment on your questions.

Darren Field: So that's probably all I have to comment on your questions today.

Speaker Change: Today.

Daniel Imbro: And your next question comes from Daniel Imbro. With Steven, your line is open. Yeah, hey, good evening, guys. Thanks for taking our questions.

And your next question comes from Daniel <unk> with Stephens. Your line is open.

Daniel Robert Imbro: Yeah, Hey, good evening, guys. Thanks for taking our questions, um, maybe one shifting uh to the dedicated side, Nick, we continue to hear anecdotes of a competitive dedicated market. Dedicated margins were a bit softer kind of underperformed seasonality, and you sold a few hundred more trucks, I guess, with a thousand trucks sold in the first half. Should those startup costs start to moderate as you move through the summer with that business online? Where we First, on startup costs, I would say we're just starting to see some of those startup costs come in. We had a pretty good chunk that's starting this month in July.

Daniel <unk>: Yeah, Hey, good evening guys. Thanks for taking our questions.

Nick Hobbs: Maybe one shift in to the dedicated side. Nick, we continue to hear anecdotes of a competitive, dedicated market. Dedicated margins were a bit softer, kind of underperform seasonality, and you sold a few hundred more trucks. I guess with a thousand trucks sold in the first half, should those start-up costs start to moderate as you move through the summer with that business online where we started to see a margin of flexion as that rolls off. Or how would you think about that business as we move to the summer?

Maybe one shifting to the dedicated Nick we continue to hear anecdotes of a competitive dedicated market dedicated margins were a bit softer kind of underperformed seasonality and you sold a few hundred more trucks I guess with 1000 trucks sold in the first half should those startup costs start to moderate as we move through the summer would that business online where we started.

Speaker Change: The margin inflection as that rolls off or how would you think about that business as we move through the summer.

Nick Hobbs: Yeah, well, first, thanks, Daniel, for the question. First, from start-up cost, I would say we're just starting to see some of those start-up costs come in. We had a pretty good chunk that's starting this month in July. And so you're going to see that a little bit in Q3, but that's a good thing for us. From a competitive standpoint, I would just say from our model and what we go after, we've been very disciplined in that. And so we've seen some competitiveness in retail, and what I would call the basic retail replenishment is where we see most of our stiff competition and a little bit more aggressive pricing from some of the one-way truck models or quasi-dedicated in that segment.

Speaker Change: Yeah well.

Speaker Change: First thanks, Daniel for the question.

Speaker Change: First from startup costs I would say, we're just starting to see some of those startup costs come in we had a pretty good chunk.

Speaker Change: Starting this month in July.

Nicholas Hobbs: And so you're going to see that a little bit in Q3. But that's a good thing for us. From a competitive standpoint, I would just say from our model and what we go after, we've been very disciplined in that. And so we've seen some competitiveness in retail, in what I would call the basic retail replenishment is where we've seen most of our stiff competition, a little bit more aggressive pricing from some of the one-way shops. Truck models are quasi-dedicated in that segment.

Speaker Change: And so youre going to see that a little bit in Q3, but that's.

Speaker Change: That's a good thing for us from a competitive standpoint.

Speaker Change: I would just say from our model and what we go after we've been very disciplined in that and so we've seen some competitiveness in retail and what I would call. The basic retail replenishment is where we're seeing most of our.

Speaker Change: Stiff competition, a little bit more aggressive pricing from some of the one way.

Truck models, who are quasi dedicated.

Nicholas Hobbs: But on the other hand, I would just tell you our pipeline, as I said, is very solid, and you've seen the numbers that we've sold. So we think we still have a very good footing on what we're going to sell. We're just facing a little bit of pressure in some of those retail areas. Daniel, hey, this is Brad Delco. I'll add a little bit more to that, too, just to clarify some things that were in some of Nick's prepared comments.

Nick Hobbs: But in the other, I would just tell you our pipeline, as I said, is very solid. And you've seen the numbers that we've sold. So we think we still have a very good footing on what we're going to sell. We're just facing a little bit of pressure in some of those retail areas.

Speaker Change: That segment better than the other I would just tell you our pipeline as I said it is very solid and you've seen the numbers that we've sold so we think we still have.

Very good footing on what we're going to sell where despite a little bit of pressure in some of those some of those retail areas.

Nick Hobbs: Daniel, hey, I'll just write down a little bit more to that too, just to clarify something that we're in some of the next prepared comments. You know, he did share he expected the ending fleet count for the year to be similar to what we saw on Q2. But how we really get there is, you know, we do have visibility, simply losses for the remainder of the year. So think of losing trucks that are sort of at their mature state, if you will. And at the same time, we have start-ups that are going to occur in Q3 and Q4.

Speaker Change: Hey.

Speaker Change: This is Brad Delco, I'll add a little bit more to that too just to clarify.

Brad Delco: Some things that were in some of the mixed prepared comments.

Brad Delco: You know, he did share that he expected the ending fleet count for the year to be similar to what we saw in Q2. But how we really get there is, you know, we do have visibility to some fleet losses for the remainder of the year. So think of losing trucks that are sort of in their mature state, if you will.

Speaker Change: Sure he expected the ending.

Speaker Change: Fleet count for the year to be similar to what we saw in Q2, but how do we really get there is we do have visibility simply losses for the remainder of the year. So think of losing truck center sort of at their mature state. If you will and at the same time, we have started off center.

Speaker Change: Do they occur in Q3, Q4, and obviously those startups have a little bit of a headwind to the margin side. So we wanted to give a little bit more clarity on that and that was or the comments. We had in our prepared remarks. We are an attempt to sort of give you guys a little bit of.

Nick Hobbs: And obviously, those startups have a little bit of headwind to them on the margin side. So we wanted to give a little bit more clarity on that. And that was our, the comments we had in our prepared marks were an attempt to sort of give you guys a little bit of four guidance on that expectation going forward.

Brad Delco: And at the same time, we have startups that are going to happen in Q3 and Q4. And obviously, those startups have a little bit of a headwind on the margin side. So we wanted to give a little bit more clarity on that, and the comments we had in our prepared remarks were an attempt to sort of give you guys a little bit of forward guidance on that expectation going forward. And your next question comes from Ken Hoexter with Bank of America. Your line is, Hey, good afternoon.

Speaker Change: For guidance on that expectation going forward.

Speaker Change: Okay.

Ken Hoexter: And your next question comes from Ken Hoekster with Bank of America. Your line is open. Hey, good afternoon. So I want to delve into kind of some of the discussion that your Transcon growth was up 5%. You know, you talked about double digits from the West Coast ports, but they were seeing kind of mid-teens volume growth. Kind of some conflicting statements. So you noted early peak season hitting shores, but some of that has yet to move. So I just want to understand, are we building inventories? Are we seeing share loss to all the rails that are now being more variable on rates, you know, for some of the peers that used to be on Burlington with you?

Kenneth Scott Hoexter: And your next question comes from Ken <unk> with Bank of America. Your line is open.

Kenneth Scott Hoexter: So I want to delve into kind of some of the discussion that your Transcon growth was up 5%. You know, you talked about double digits from the West Coast ports. But they were seeing kind of mid-teens volume growth, kind of some conflicting statements. So you noted early peak season hitting shores, but some of that has yet to move. So I just want to understand, are we building inventories? Are we seeing share loss to other rails that are now being more variable on rates?

Ken: Hey, good afternoon.

Speaker Change: So I don't want to delve into kind of some of the discussion that your transcon growth was up 5% you talked about double digits from the west coast ports.

Speaker Change: But they were seeing kind of mid teens volume growth.

Speaker Change: Some conflicting statements so.

Speaker Change: I noted early peak season, hitting shores, but some of that has yet to move. So I just want to understand are we building inventories are we seeing share loss to other rails that are now being more variable on rates.

Speaker Change: For some of the peers that used to be on Burlington with you I wanted to stay in kind of the market dynamics in there Ken.

Darren P. Field: You know, for some of the peers that used to be on Burlington, we've seen some of that. I want to understand kind of the market dynamics there, if you can. I would fully expect to outperform the domestic market on Southern California eastbound volume, so I don't believe we're losing share to any other domestic intermodal channel. Now in terms of the pandemic window, so if I go back to 2020 through 2023, there was an uptick in the share of transload or domestic volume as a percentage of the import of goods through the Southern California or West Coast gateways, and that deteriorated so far in 2024.

Darren Field: I want to understand kind of the market dynamics in there if you can.

Darren Field: I would fully expect to outperform the domestic market on Southern California eastbound volume. So I don't believe we're losing share to any other domestic intermodal channel now in terms of during the pandemic window. So if I go back to 2020 through 2023, there wasn't an uptick in the share of transload or domestic volume as a percentage of the imported goods through the Southern California or West Coast gateways. And that deteriorated so far in 2024. It's hard to say what's happened with that cargo. I don't believe it has moved domestically, intermodally. I do believe that the share of intact international intermodal is up slightly.

Ken: I would fully expect to outperform the domestic market on southern California eastbound volume. So I don't believe we're losing share to any other domestic intermodal channel now in terms of during the pandemic windows.

Speaker Change: If I go back to 2020 through 2023, there was an uptick in the share of trans load or domestic volume as a percentage of the imported goods through the southern California, or west coast gateways and that deteriorated so far in 2012.

For hard to say, what's happened with that cargo I don't believe it has moved domestically intermodal I do believe that the share of intact International intermodal is up slightly maybe that's because it can.

Darren P. Field: It's hard to say what's happened with that cargo. I don't believe it has moved domestically intermodally. I do believe that the share of intact international intermodal is up slightly. Maybe that's because it converted from the East Coast to the West Coast, and on the East Coast, it was intact, and it still is today even though it routes through the West Coast.

Darren Field: Maybe that's because it converted from the East Coast to the West Coast, and on the East Coast it was intact and it still is today, even though it's routing through the West Coast. We're constantly communicating with our customers, trying to learn more about what's happened with the mix of transload versus intact international. Is some of that import cargo moving into storage, and we'll ship later. I would. That's a reasonable question.

Speaker Change: Converted from the East coast to the West Coast and on the East Coast. It was intact and it still is today, even though it's routing through the west coast.

Darren P. Field: We're constantly communicating with our customers trying to learn more about what's happened with the mix of transload versus intact international, some of that import cargo moving into storage and will ship later. That's a reasonable question. I don't have a great answer for you on it other than I'm confident that we're maintaining and growing our share of eastbound domestic intermodal volumes from the West Coast. In terms of why the imports are as strong as they are, and we're not necessarily keeping up with that, I don't know. But we did highlight that our Southern California volumes were up double digits. I didn't tell you how many double digits; I just said double digits.

Speaker Change: We're constantly communicating with our customers trying to learn more about what's what's happened with the mix of trans load versus intact international is some of that import cargo moving into storage and we will ship later I would I would.

Speaker Change: That's a reasonable question.

Darren Field: I don't have a great answer for you on it other than, I'm confident that we're maintaining and growing our share of eastbound domestic intermodal volumes from the West Coast. In terms of why the imports are as strong as they are, and we're not necessarily keeping up with that, I don't know; we did highlight that our Southern California volumes were up double digits. I didn't tell you how many double digits; I just said double digits. So we feel good about our pipeline for Eastbound California business, and we will continue to look to grow there and all other markets.

I don't have a great answer for you on it other than.

Speaker Change: I'm confident that we're maintaining and growing our share of eastbound domestic intermodal volumes from the west coast.

Darren P. Field: So we feel good about our pipeline for eastbound California business, and we will continue to look to grow there and all other markets. Unknown Attendee Great, Dr. Hoening, just shifting gears a little bit to talk about ICS. Can you unpack the kind of volume shift, the year-over-year volume decline of 25% a little bit more to give us a better understanding of what is going on there? I think you alluded to the BNSF business that you bought being kind of not quite what you expected? Can you elaborate on that a little bit more as well? Yeah, Ravi, thanks for the question.

Speaker Change: In terms of why the imports are as strong as they are in that and we're not necessarily keeping up with that.

Speaker Change: I don't know, we did highlight that our southern California volumes were up double digits I didn't tell you how many double digits I just said double digits. So we.

Speaker Change: We feel good about our pipeline for eastbound, California business and we will continue to look to grow there and all other markets.

Speaker Change: Okay.

Robbie Shanker: And your next question comes from the line of Robbie Shanker with Morgan Stanley. Your line is open. Great job, everyone.

Speaker Change: And your next question comes from the line of Ravi Shanker with Morgan Stanley. Your line is open.

Speaker Change: Great job everyone.

Robbie Shanker: Just shifting a little bit to talk about ICS. Can you unpack the volume shift, the year-over-year volume for about 25%, a little bit more to give us a better understanding of what is going on there? I think you alluded to the BNSF business that you bought, kind of being not quite what you expected. Can you elaborate on that a little bit more as well? Thank you. Yeah, I mean, thank you for the question. You know, it's been an incredibly difficult and competitive market. That's certainly benefactor. As we stated in previous quarters, we've been focused largely on quality, and that's also weighed in on some of our volume losses.

Ravi Shanker: Just shifting gears, a little bit and talk about Ics can you unpack the kind of volume of ship the year over year volume, 25%, a little bit more kind of to give us a better understanding of what was going on there I think you alluded to the.

Speaker Change: B NSF business that you bought kind of being not quite what you expected can you elaborate on that a little bit more as well. Thank you.

Bradley W. Hicks: You know, it's been an incredibly difficult and competitive market, so that's certainly been a factor. As we've stated in previous quarters, we've been focused largely on quality, and that's also weighed in on some of our volume losses. And in the commentary and my prepared remarks, I made reference to the impact of some of the challenges that we've had on the BNSF Acquisition. And really, what we see there is that we lost some business shortly after acquiring the brokerage assets of VNSF Logistics, which was unexpected. We've also accelerated, and I'm happy to say that we have been largely successful at integrating from a technology standpoint, but that came with some incremental costs in And so that's also weighed us down.

Speaker Change: Yeah Ravi Thanks for the question.

Speaker Change: It's been incredibly difficult and competitive market, that's certainly benefactor.

Speaker Change: As we stated in previous quarters, we've been focused largely on quality.

Speaker Change: And that's also weighing in on some of our volume losses, and then the commentary in my prepared remarks, I made reference to.

Brad Hicks: And in the commentary and my prepare remarks, I made reference to the impact of some of the challenges that we've had on the BNSF acquisition. And so really what we see there is that we lost some business shortly after acquiring the brokerage assets of BNSF Logistics that were unexpected. We've also accelerated, and I'm happy to say that we have been largely successful at integrating from a technology, but that came with some incremental cost in the first half. And so that's also a way to stem.

Speaker Change: The impact of some of the challenges that we've had on the NSF.

Speaker Change: Acquisition.

Speaker Change: And so really what we see there is that we lost some business shortly after.

Speaker Change: Acquiring.

Speaker Change: The brokerage assets would be NSF logistics that were unexpected.

Speaker Change: We've also accelerated and I'm happy to say that we have been largely successful integrating from a technology, but that came with some incremental cost in the first half.

Speaker Change: And so that's also weighed us down when we think about the bigger picture and where our focus has been there is no doubt that we're dissatisfied with our performance in Ics.

Bradley W. Hicks: You know, when we think about the bigger picture and where our focus has been, there's no doubt that we're dissatisfied with our performance in ICS. I am, however, encouraged by what we saw, and Spencer referenced it kind of in the seasonal trends, and I think even Darren mentioned what they saw in their business. We saw something very similar, both not only in ICS but also at JBT, when we really think about breaking down the second quarter month by month, and we saw a really good step forward from our May volumes into our June volumes on a workday basis.

Brad Hicks: You know, when we think about the bigger picture and where our focus has been, there's no doubt that we're dissatisfied with our performance in ICS. I am, however, encouraged at what we saw, and Spencer referenced it kind of on the seasonal trends, and I think even Darren mentioned what they saw in their business. We saw something very similar, both not only in ICS, but also a GNDT, when we really think about breaking down the second quarter month by month, and we saw a really good step forward from our May volumes into our June volumes on a workday basis.

Speaker Change: However, encouraged at what we saw in Spencer referenced kind of on the seasonal trends, but I think even darin mentioned and what they saw in their business. We saw something very similar both not only at Ics, but also at JBT. When we really think about breaking down the second quarter month by month, and we saw really good step.

Forward from RMA volumes into our June volumes on a workday basis and so.

Brad Hicks: And so, you know, I feel like we saw a step up greater than what we historically would see, and I do believe that in part that is our strategy starting to take form on growing back with quality partners, quality customers, and quality carriers. Again, can't quite see it fully in our results yet, but we took a nice step forward on our volumes.

Bradley W. Hicks: And so, you know, I feel like we saw a step up greater than what we historically would see, and I do believe that, in part, that is our strategy starting to take form on growing back with quality partners, quality customers, and quality carriers. Again, I can't quite see it fully in our results yet, but we took a nice step forward on our volumes. And your next question comes from the line of Jason Seidl with TD Cowan. Your line is open. Thank you, operator. I want to get back a little bit to the intermodal side of things on the margins.

Speaker Change: I feel like we saw.

Speaker Change: Up greater than what we historically would see and I do believe is in part that is our strategy is starting to take form on growing back with quality.

Speaker Change: Gartner is quality customers and quality carriers.

Speaker Change: Again can't quite see it fully in our results yet, but we took a nice step forward on our volumes.

Jason Seidl: And your next question comes from the line of Jason Seidel with TD Cowan. Your line is open. Thank you, operator.

Speaker Change: And your next question comes from the line of Jason Seidl with TD Cowen Your line is open.

Jason H. Seidl: Thank you operator wanted to get back a little bit to the intermodal side on the margins how should we.

Jason Seidl: I want to get back a little bit to the other side on the margins. How should we think about some of your commentary about lower utilization and increased cost related to equipment? Is that coming from the Walmart assets, and how should I think about that sequentially? You know, Jason, I mean, the acquisition of Walmart equipment hasn't really been fully inside our results at this point. So, I mean, we have, we have more J B Hunt equipment, whether it's Walmart or our own, than what we're fully utilizing today. And so, we have significant growth capacity. In previous quarterly calls, I have said where we were able to handle as much as 20% more than what we are.

Jason H. Seidl: How should we? Think about some of your commentary about lower utilization and increased costs related to equipment. Is that coming from Walmart's assets? And how should I think about that?

Jason H. Seidl: Think about some of your commentary about lower utilization and increased costs related to equipment is that coming from the Walmart assets and how should I think about that sequentially.

Darren P. Field: You know, Jason, I mean, are we? The acquisition of the Walmart equipment hasn't really, it isn't fully inside our results at this point. So, I mean, we have more J.B. Hunt equipment, whether it's Walmart or our own, than we're fully utilizing today. And so, we have significant growth capacity in previous quarterly calls, I have said, where we were able to handle as much as 20% more than we are today. And that certainly remains true today.

Jason H. Seidl: Yeah, Jason I mean are we.

Speaker Change: The acquisition of the Walmart equipment is hasnt really.

Speaker Change: It didn't fully inside our results at this point. So I mean, we have we have more J b hunt equipment, whether it's walmart or our own than what we're fully utilizing today and so we have significant growth capacity in previous quarterly calls I have said, where we were able to have.

<unk> as much as 20% more than what we are and that certainly remains true today.

Brad Hicks: And that, that certainly remains true today. So, on the margin front, we have significant leverage to gain. By adding volume and putting that equipment to work.

Darren P. Field: So on the margin front, we have significant leverage to gain by adding volume and putting that equipment to work. But again, we also have negative pricing pressure at the current moment, which is also a headwind, obviously, to margin performance.

Speaker Change: So on the margin front, we have significant leverage to gain by adding volume and putting that equipment to work.

Brad Hicks: But again, we also have negative pricing pressure at the current moment, which is also a headwind, obviously, to margin performance. You know, hey, relative to our industry, I think we're doing okay in that area, but certainly we have an awful lot of work to do moving forward to get back to the returns we expect for our shareholders.

Speaker Change: But again, we also have negative pricing pressure at the current moment, which is also a headwind obviously to margin performance.

Darren P. Field: Um, you know, relative to our industry, I think we're doing okay in that area, but certainly, we have an awful lot of work to do moving forward to get back to the returns we expect for our shareholders. And your next question comes from the line of Tom Waterwitz with UBS. Your line is open. Yeah, good afternoon.

Speaker Change: Hey relative to our industry I think we're doing okay in that area.

Speaker Change: But certainly we have an awful lot of work to do moving forward to get back to the returns we expect for our shareholders.

Okay.

Tom Waterwoods: And your next question comes from the line of Tom Waterwoods with UBS. Your line is open. Yeah, good afternoon. So, I wanted to ask you a little bit more about how we think about your, your volume growth in intermodal and second half. You did have some traction on volumes and three key, I think even more so in four key last year. So, do you think we should be thinking about kind of worse year-to-year performance, or, or there, you know, as the cops get tougher, or do you have some visibility maybe to some momentum or, I know, Walmart loads coming in that would help you to kind of stay, you know, flatish on the year-to-year.

Speaker Change: And your next question comes from the line of Tom <unk> with UBS. Your line is open.

Speaker Change: Okay.

Thomas Richard Wadewitz: So I wanted to ask you a little bit more about how we think about year-over-year volume growth in intermodal and the second half. You did have some traction on volumes in 3Q, and I think even more so in 4Q last year. So do you think we should be thinking about kind of worse year-over-year performance or are there, you know, as the comps get tougher, or do you have some visibility maybe to some momentum or, I don't know, Walmart loads coming in that would help you to kind of stay, you know, flattish on the year-over-year? Thank you.

Tom: Yes. Good afternoon. So I wanted to ask you a little bit more about how we think about year over year volume growth in intermodal in second half you did have some traction on volumes in <unk> I think even more so in <unk> last year.

Speaker Change: Do you think we should be thinking about kind of worse year over year performance or are there.

Speaker Change: As the comps get tougher or do you have some visibility maybe just some momentum more in a walmart loads coming in that would help you to kind of stay.

Speaker Change: Flattish on a year over year. Thank you.

Tom Waterwoods: Thank you.

Tom Waterwoods: Well, I think as much as anything, and I'm going to have Spencer to maybe jump in here when I'm done. Just our, as we move through the second quarter, we were feeling momentum, and we've kind of tried to highlight that and do feel like our customers are aware that last year, they kind of caught us by surprise with some of that volume. And everyone is aware that surprises are not always best when it comes to an efficient transportation network. So, we're engaged in conversations with all of our customers. We have capacity to solve their needs and we'll look for ways to continue to grow our business. Also, quenchally, and year-over-year will always be our goal.

Speaker Change: Yeah.

Darren P. Field: Well, I think as much as anything, and I'm going to ask Spencer to maybe jump in here when I'm done, just our As we moved through the second quarter, we were feeling momentum, and we've kind of tried to highlight that, and do feel like our customers are aware that last year, they kind of caught us by surprise with some of that volume, and everyone is aware that surprises are not always best when it comes to an efficient transportation network. So we're engaged in conversations with all of our customers.

Speaker Change: But I think as much as anything and I'm going to ask Spencer to maybe jump in here when I'm done.

Speaker Change: Our.

Spencer Frazier: As we move through the second quarter, we were feeling momentum and we've kind of tried to highlight that and do feel like our customers are aware that last year.

Spencer Frazier: They kind of caught us by surprise with some of that volume and everyone is aware the surprises are not always best when it comes to an efficient transportation network. So we're engaged in conversations with all of our customers we have capacity to solve their needs and we.

Darren P. Field: We have the capacity to solve their needs, and we'll look for ways to continue to grow our business. Both sequentially and year-over-year will always be our goal. We'll have to wait and see, but certainly we have felt some momentum as the second quarter went on. Yeah, Darren, I'll share a few things. Thanks for the question.

Spencer Frazier: We'll look for ways to continue to grow our business, both sequentially and year over year will always be our goal.

Spencer Frazier: We'll have to wait and see, but certainly, we have felt some momentum, and second quarter went on. There are no share if you think. Thanks for the question.

Spencer Frazier: Have to wait and see but certainly.

Spencer Frazier: We have felt some momentum as second quarter went on.

Spencer Frazier: You know, we appreciate every customer that we have and all the conversations we have. One of the things as we look forward, you know, they are talking about their peak season plan. But, you know, when we ask our customers for their forecast, that's an area they still struggle with. They've struggled in the past, they struggle today, and we really lean into our team, leveraging our data, sharing our expectations, and really collaborate with our customers from here to try to understand what they need and how we can set our ops teams up to serve them well. You know, if we look at the end of the month and the end of the quarter, I don't think that two weeks is going to make a trend, or two months.

Spencer Frazier: Yes.

Spencer Frazier: Sure. Thanks, Tom Thanks for the question.

Spencer Frazier: You know, we appreciate every customer that we have and all the conversations we have. One of the things that we look forward to, you know, they are talking about their peak season plans. But, you know, when we ask for our customers' forecast, that's an area they still struggle with. They've struggled in the past, they've struggled today, and we really lean into our team, leveraging our data, sharing our expectations, and really collaborate with our customers from here to try to understand what they need and how we can set our ops teams up to serve them well.

We appreciate every customer that we have in all the conversations we have.

Speaker Change: One of the things as we look forward you know they are talking about their peak season plans.

Spencer Frazier: But.

Speaker Change: When we ask for our customers forecast, that's an area they still struggle with it.

Speaker Change: They struggled in the past they strove today, and we really leaned into our team leveraging our data.

Speaker Change: Sharing our expectations and really collaborate with our customers from here to try to understand what they need and how we can set our ops teams up to serve them well.

Spencer Frazier: You know, if we look at the end of the month and the end of the quarter, I don't think that two weeks is going to make a trend or two months. You know, what we need to do is get actual data from our customers and their expectations on what they anticipate their demand is going to be, and then really set ourselves up to serve them well.

Speaker Change: If we look at the end of the month and the end of the quarter I don't think that.

Speaker Change: Two weeks is going to make a trend.

Speaker Change: Or two months.

Spencer Frazier: You know, what we need to do is get actual data from our customers and their expectations on what they anticipate their demand is going to be, and then really set ourselves up to serve them well. And that's really what we're focused on right now, and looking forward to working with them to do that. And your next question comes from the line of Bascome Majors with Susquehanna. Your line is open.

Speaker Change: What we need to do is get actual data from our customers and their expectations on what they anticipate their demand is going to be and then really set ourselves up to serve them well and that's really what we're focused on right now and looking forward to working with them to do that.

Spencer Frazier: And that's really what we're focused on right now, and looking forward to working with them to do that.

Bascome Majors: And your next question comes from the line of Bascome Majors with Susquehanna. Your line is open. Following up on the comments you just made about peak season, you know, if we look the fourth quarter, you typically do see some sequential profit improvement, you big holiday lift and final mile, you summon intermodal ICS and truck load and maybe a more mixed performance and dedicated, but just high level.

Bascome Majors: And your next question comes from the line of Bascom majors with Susquehanna. Your line is open.

Bascome Majors: Following up on the comments you just made about peak season, you know, if we look at the fourth quarter, you typically do see some sequential profit improvement, a big holiday lift and final mile, Summit Intermodal ICS and Truckload and maybe a more mixed performance and dedicated. At a high level, can you talk about the fundamental conditions that separate a normal to good peak season at Hunt from a disappointing one on the bottom line? And just when would you typically have the customer conversations that would give you good visibility into how that peak season will actually play out? So the third and fourth quarter, you know, last year they did catch us by surprise.

Bascome Majors: Following up on the comments you just made about peak season, if we look the fourth quarter you typically do see some sequential profit improvement big holiday lift in final mile Summit intermodal Ics in truckload and maybe a more mixed performance in dedicated but.

Bascome Majors: Can you talk about the fundamental conditions that separate a normal to good peak season at hunt from a disappointing one on the bottom line and just when would you have typically the customer conversations that would give you good visibility into how that peak season will actually play out. Thank you.

Speaker Change: Just high level can you talk about the fundamental conditions that separate a normal to good peak season at hot from a disappointing one on the bottom line.

And just when would you have typically the customer conversations that would give you good visibility into how that peak season will actually play out. Thank you.

Shelley Simpson: Bascome, thanks for the question. It is Shelley.

Baskin: Baskin. Thanks for the question as Shelly I think Spencer did a nice job highlighting that we are having those conversations with our customers I would tell you. This is normally the time that we would be having that.

Shelley Simpson: You know, I think Spencer did a nice job highlighting that we are having those conversations with our customers. I would tell you this is normally the time that we would be having those, and I think you heard Darren highlight that we're encouraged with more seasonal demand, similar to what we've seen pre-pandemic. So I would tell you this books and fields more live pre 2020. This would be consistent with how we had conversations with customers in the past. I think our customers have done a better job on their big time science and understanding their volume better.

Baskin: I think you heard Dara and highlight that we're encouraged with more seasonal demand similar to what we've seen pre pandemic. So I would tell you that looks and feels more like pre 2020.

Speaker Change: This should be consistent with how we had conversations with customers in the past I think our customers have done a better job on their bid compliance and understanding their volume better.

Shelley Simpson: I think we're all just a little bit hesitant, you know, we've had some ball starts over the last couple of years. And we just want to make sure that things are steady and that we can see a clear line of sight. I think our customers are even a little bit skittish about what they can expect. So third and fourth quarter, you know, last year, they did catch a surprise. We did an outstanding job. Us, our railroad providers with the across the board. We did a great job servicing our customers. Our customers realize that now; that's why we're having those conversations.

Speaker Change: I think we're all just a little bit hesitant, we've had some false starts over the last couple of years.

Speaker Change: And we just wanted to make sure that things are steady and that we can see clear line of sight I think our customers are even a little bit skittish about what they can expect so third and fourth quarter.

Darren P. Field: We did an outstanding job. Us, our railroad providers, I would say across the board, we did a great job servicing our customers. Our customers realize that. Now that's why we're having those conversations. What is the plan?

Speaker Change: Last year, they didn't catch us by surprise, we did an outstanding job us our railroad providers I would say across the board we did a great job servicing our customers our customers realize that now thats why were having this conversation what is the plan how do we think about that.

Shelley Simpson: What is the plan? How do we think about that? Certainly, if we move back to a more seasonal pattern, you know, we would expect the same things to occur from a demand perspective and from a profitability perspective.

Speaker Change: Certainly if we move back to a more seasonal pattern. We would expect the same things to occur from a demand perspective and from a profitability perspective.

Speaker Change: Okay.

Brandon Oglinski: And your next question comes from the line of Brandon Oglinski with Barclays. Your line is open. Hey, good afternoon. And thanks for taking the question.

Darren P. Field: How do we think about that? Certainly, if we move back to a more seasonal pattern, you know, we would expect those same things to occur from a demand perspective and from a profitability perspective. And your next question comes from the line of Brandon Oglenski with Barclays. Your line is open. Hey, good afternoon. And thanks for taking the question. Shelley, maybe we can follow up from there.

Brandon Robert Oglenski: And your next question comes from the line of Brandon <unk> with Barclays. Your line is open.

Brandon Robert Oglenski: And welcome to the hot seat of CEO. But this is the seventh consecutive quarter of material operating income declines for you guys. I mean, do shareholders just at this point need to wait for an inflection in the market? Or is there more that you can do from your position?

Brandon: Hey, good afternoon, and thanks for taking the question Shelley, maybe if we can follow up from there.

Brandon Oglinski: Shelley, maybe if we can follow up from there and welcome to the hot CSCO, but this is the seventh quarter of material operating income to climb through you guys. I mean, do shareholders just at this point need to wait for an inflection in the market? Or is there more that you can do from your position? I mean, I know we talked about highway conversions, but if we look back six or seven years, intermodal volumes really haven't changed all that much in your business. It's a six consecutive quarters of, you know, pretty material losses at ICS.

Brandon: And welcome to the Hudson CEO, but this is the seventh quarter material operating income declined through you guys.

Speaker Change: To shareowners just at this point need to wait for an inflection in the market or is there more that you can do from your position I mean, I know, we talk about highway conversions, but if we look back six or seven years. The intermodal volumes really haven't changed all that much in your business, if the sixth consecutive quarter of pretty material losses at Ics. So what can you do in the <unk>.

Shelley Simpson: I mean, I know we talked about highway conversions. But if we look back six or seven years, intermodal volumes really haven't changed all that much in your business. It's the sixth consecutive quarter of pretty material losses at ICS. So what can you do in the interim to change outcomes in your business without, you know, the market maybe potentially inflecting better for you? Yeah, thank you, Brandon. Appreciate the comments.

Brandon Oglinski: So what can you do in the interim to change outcomes in your business without, you know, the market maybe potentially influxing better for you?

Brandon: Interim to change outcomes in your business without.

Speaker Change: The market may be potentially influx in better for you.

Shelley Simpson: Yeah, thank you, Brandon. I appreciate the comments. You know, certainly our last two years has been the most difficult time in my 30 year career. It's been the most difficult time in predicting and understanding where our customers are headed and how we need to think about that from a quarter to four to basis, but we are very focused on long term. One thing we did learn from the pandemic was we weren't prepared and ready for our customers. and that was to the detriment of our long-term success. We have main strategic decisions to invest in our people, our technology, and our capacity to be prepared and ready.

Shelley Simpson: You know, certainly, our last two years have been the most difficult time in my 30 years. It's been the most difficult time predicting and understanding where our customers are headed and how we need to think about that from a quarter to quarter basis. But we are very focused on the long term. One thing we did learn from the pandemic was that we weren't prepared and ready for our customers, and that was to the detriment of our long-term success.

Speaker Change: Yeah. Thank you Brandon I appreciate the comments certainly our last two years has been deemed most difficult time in my 30 year career, it's been the most difficult time in predicting and understanding where our customers are headed and how do we need to think about that from a quarter before the basis, but we are very focused on long term.

Speaker Change: One thing we did learn from the pandemic, which we weren't prepared and ready for our customers and that was to the detriment of our long term success, we have made strategic decisions to invest in our people our technology and our capacity to be prepared and ready I believe our customers know that and think that I would tell you.

Shelley Simpson: We have made strategic decisions to invest in our people, our technology, and our capacity to be prepared and ready. I believe our customers know that and think that. I will tell you some of the things that you've heard from businesses today and even in our past; we are preparing ourselves for best-in-class service. That, for us, means we want to separate the service levels we're giving our customers so they know they can expect that from J.B. Hunt on a consistent basis.

Shelley Simpson: I believe our customers know that and think that. I will tell you some of the things that you've heard from the businesses today and even in our past; we are preparing ourselves with best-in-class service. That for us means we want to separate the service levels we're giving our customers as they know they can expect that from J behind on a consistent basis. And then creating more value for our customers. You know, we do look at it long-term, and we also recognize that we have to deliver long-term returns for our shareholders. We think this is the best strategy that sets us up for that long-term.

Speaker Change: Some of the things that you've heard from the businesses.

Speaker Change: And even in our past we are preparing ourselves with best in class service that for US means you want to separate the service levels, we're giving our customers that they know they can expect that from J B Hunt on a consistent basis, and then creating more value for our customers. We do look at it long term and we also recognize that we have to deliver.

Shelley Simpson: And then creating more value for our customers. You know, we do look at it long-term, and we also recognize that we have to deliver long-term returns for our shareholders. We think this is the best strategy that sets us up for the long term. I think in our conversations with customers today, we're encouraged by some of the comments that they're making towards us in the areas that we're heavily focused on. And so I would tell you, ICS, we're not pleased with the performance in ICS.

Speaker Change: Long term returns for our shareholders. We think this is the best strategy that sets us up for that long term.

Shelley Simpson: I think in our conversations with customers today, we're encouraged with some of the comments that they're making towards us in the areas that we're heavily focused on. And so I would tell you, ICS, we're not pleased with performance in ICS. We're not pleased with our performance. I would say to our expectations, but our relative performance has been pretty good. That doesn't mean that we're happy. But when I look at where we're at, relative to the competition, and how we are doing from a market share gain, a craftability perspective, our return profile, those three areas, we're making progress.

Speaker Change: In our conversations with customers today, we're encouraged with some of the comments that they are making towards that in the areas that we're heavily focused on it and so I would tell you Ics we're not pleased with performance in Ics were not pleased with our performance I would say to our expectations, but our relative performance has been pretty.

Shelley Simpson: We're not pleased with our performance, I would say, compared to our expectations. But our relative performance has been pretty good. That doesn't mean that we're happy.

Speaker Change: Good.

Speaker Change: It doesn't mean that we're happy.

Shelley Simpson: But when I look at where we're at relative to the competition and how we are doing from a market share gain, a profitability perspective, our return profile, those three areas, we're making progress. And that's what we're going to continue to focus on. You know, I will say this, as we've moved here into the second quarter and moving here into the third quarter, one thing we do know is we're at least closer to calling some kind of inflection. Not that we're calling it today, but I will say there are signs that tell us that things are moderating or getting better. We are skittish.

Speaker Change: When I look at where we're at relative to the competition and how we are doing from a market share gain a profitability perspective, our return profile those three areas, we're making progress and that's what we're going to continue to focus on.

Shelley Simpson: And that's what we're going to continue to focus on. You know, I will say this: as we move here in this second quarter and moving here in the third quarter, you know, one thing we do know is we're at least closer to calling some kind of inflection. Not that we're calling it today, but I will say there are signs that tell us that things are moderating or getting better. We are skittish. I've been conditioned now over the last two years to be very cautious on the needs that we say. And I think you're hearing a tone that says, "Listen, we have better signals."

Speaker Change: I will say that since we moved here in the second quarter and maybe here in the third quarter.

Speaker Change: One thing, we do know is where at least closer to.

Speaker Change: Calling some kind of inflection not that we're calling it today, but I will say there are signs that tell us that things are moderating or getting better. We are skittish I've been condition now over the last few years to be very cautious on the fees that we say and I think youre hearing a tone that says listen we have.

Shelley Simpson: I've been conditioned now, over the last few years, to be very cautious about the things that we say. And I think you're hearing a tone that says, listen, we have better signals. But it doesn't mean that they're great.

Speaker Change: Better signals it doesn't mean that they are great and we need more information from our customers to get US better today is the time for us to make sure that we're close to our customers that we're prepared and ready, but I would tell you we are not changing our targets.

Shelley Simpson: It doesn't mean that they're great. And we need more information from our customers to get us better. Today is the time for us to make sure that we're closer to our customers, that we're prepared and ready, but I will tell you, we are not changing our targets. We have a long-term goal across all of our businesses to make sure we deliver appropriate returns to our shareholders. That will be our focus. We think we're taking the best strategic decision and move to make sure that we accomplish that.

Shelley Simpson: And we need more information from our customers to understand them better. Today is the time for us to make sure that we're close to our customers, that we're prepared and ready. But I will tell you, we are not changing our target. We have a long-term goal across all of our businesses to make sure we deliver appropriate returns to our shareholders. That will be our focus.

Speaker Change: We have a long term goal across all of our businesses to make sure we deliver appropriate returns to our shareholders that will be our focus will be presenting the best strategic decision.

Speaker Change: Decision and move to make sure that we accomplish that.

Speaker Change: Yes.

Jeff Kauffman: And your next question comes from the line of Jeff Kaufman with Vertical Research Partners. Your line is open. Thank you very much, and congratulations, Shelley.

Shelley Simpson: We think we're taking the best strategic decision and move to make sure that we achieve this. And your next question comes from the line of Jeff Kauffman with Vertical Research Partners. Your line is open. Thank you very much and congratulations, Shelley.

Speaker Change: And your next question comes from the line of Jeff Kauffman with vertical research partners. Your line is open.

Jeffrey Asher Kauffman: Thank you very much and congratulations Shelley.

Speaker Change:

Jeffrey Asher Kauffman: I guess I just want to think about this bigger picture because this downturn surprised everybody in terms of the magnitude and the duration. And, you know, here we are still seeing pricing trends coming in weaker than expected. You know, even though volume feels a little bit more seasonal, there's no real view of any catalyst for acceleration. I guess looking back on this, what do you think we got wrong about the magnitude of this turn? And, you know, what do you think it takes to catalyze us back forward on the volume and pricing side? Well, thank you, Jeff. Good question.

Jeff Kauffman: I guess I just want to think about this bigger picture because this downturn, I think, surprised everybody in terms of the magnitude and the duration. And here we are still seeing pricing trends coming in weaker than expected. Even though volume feels a little bit more seasonal, there's no real view of any catalyst for acceleration. I guess looking back on this, what do you think we got wrong about the magnitude of this turn? And what do you think it takes to catalyze us back forward on the volume of pricing trends? Thank you, Jeff. Good question. You know, I will say, I think one of the things that we didn't understand, same thing we didn't understand going through the pandemic, was how much the change would occur.

Speaker Change: Hi.

Yes, I just wanted to think about this bigger picture because this downturn.

Speaker Change: Surprised everybody in terms of the magnitude and the duration.

Speaker Change: Here, we are still seeing pricing trends coming in weaker than expected.

Speaker Change #100: Even though volume feels a little bit more seasonal there is no real view of any catalyst for acceleration I guess looking back on this what do you think we got wrong.

Speaker Change #101: About the magnitude of this turn.

Speaker Change #102: And what do you think it takes two to catalyze us back forward on the volume and pricing side.

Speaker Change #101: Okay.

Shelley Simpson: You know, I will say, I think one of the things that we didn't understand, the same thing we didn't understand going through the pandemic, was how much the change would occur. And so, if I look back on our experience, in 2009, we had the Great Recession; we understood, and we were prepared and ready. One of the changes, though, that happened then, as prices went downwards during that Great Recession, so did our

Speaker Change #103: Well. Thank you Jeff good question.

Speaker Change #104: I will say I think one of the things that we didn't understand same thing we didnt understand going through the pandemic was how much the change would occur and so.

Shelley Simpson: And so, if I look back on our experience, in 2009, we had the Great Recession. We understood, and we were paired and ready. One of the changes that happened then, as price went downwards during that Great Recession, so did our cost. We're in an inflationary cost perspective with price pressure coming down, and those two things really is the first time I've seen that, at least in my history, inside the organization. I don't know that anybody believes those two things would occur as they have. You know, you typically look at history, try to learn from what you know there, and then make sure you're prepared and ready.

Speaker Change #105: If I look back on our experience in 2009, we had the great recession, we understood that we were pivoting ready one of the changes that happened then as price.

Speaker Change #105: Downwards during that great recession, so did our cost we're in an inflationary costs.

Shelley Simpson: We're in an inflationary cost perspective, with price pressure coming down. And those two things really are the first time I've seen that, at least in my history inside the organization. I don't know that anybody believed those two things would occur as they have. You know, you typically look at history, try to learn from what you know there, and then make sure you're prepared and ready.

Speaker Change #105: Perspective.

Speaker Change #105: Price pressure coming down and there's two things really is the first time I've seen that at least in my history inside the organization I don't know that anybody believes those two things would occur as they have.

Speaker Change #105: You typically looked at history trying to learn from what you know there and then make sure you are prepared and ready that I would say with more of a disconnect than maybe what we expected.

Shelley Simpson: That, I would say, was more of a disconnect than maybe what we expected. And then, just like that, one of the things that we've used in our history is, what's happened with Capacity? And so we've estimated that carriers are losing money for now, greater than two years. That is unusual. It's unusual from our history. That typically would mean that capacity would come out of the market. And that we would start the recovery. That has not happened. And I think that's been the biggest miss of this last two years of a freight recession. We haven't been able to predict when capacity will leave the market.

Speaker Change #105: And then just the debt one of the things that we've used in our history is whats happened with capacity.

Shelley Simpson: That, I would say, was more of a disconnect than maybe we expected. And so we've estimated that carriers are losing money for now for more than two years. That is unusual.

Speaker Change #105: So we've estimated that carriers are losing money for now greater than two years that is unusual it's unusual from our history that typically would mean that capacity would come out of the market and then we would start the recovery that has not happened and I think that's been the biggest myth.

Shelley Simpson: It's unusual for our history. That typically would mean that capacity would come out of the market, and we would start the recovery. That has not happened, and I think that's been the biggest miss of the last two years of the freight recession. We haven't been able to predict when capacity will leave the market, and we know that that has to occur, or demand has to pick up more, but I would tell you with more likelihood that the capacity side would exit more quickly than demand would increase even more. So I would say those are the two things.

Speaker Change #105: This last two years of a freight recession, we haven't been able to predict when capacity will leave the market.

Shelley Simpson: And we know that that has to occur. Or demand has to pick up greater, but I would tell you more likelihood that the capacity that I would exit more quickly than demand would increase even more. So I would say those are the two things.

Speaker Change #105: And we noticed that has to occur.

Speaker Change #105: Or demand has to pick up greater but I would tell you more likelihood that that the capacity side would exit more quickly than demand would increase.

Shelley Simpson: I'm going to ask the team if there's anything else that they see, but those would be kind of the two things I would say that if we had known better, we probably could have thought through. And your final question comes from the line of David Vernon with Bernstein. Your line is open.

Speaker Change #105: Even more so I would say those are the two states someone ask the team if theres anything else that they see but those would be kind of the two things I would say.

Shelley Simpson: I'm going to ask the team if there's anything else that they see. But those would be kind of the two things I would say that we, if we'd known better, we probably could have thought through a few things.

Speaker Change #105: If we'd known better we probably could have thought through a few things.

David Vernon: And your final question comes from the line of David Vernon with Bernstein. Your line is open. Hey, good afternoon, guys. And thanks for being here. I just wanted to ask a question about within the intermodal service. You know, can you give us some context or color around how the quantum product is performing that you guys announced a little while ago. And then with the shift over. Or the Mexican traffic from the KCF to Mexico to the FXC. I'm just wondering if you could just give us an update on how that transition is going. Is there been any impact on customer tradition or anything like that in the North South Straight.

Speaker Change #105: Yeah.

Speaker Change #105: And your final question comes from the line of David Vernon with Bernstein. Your line is open.

David Scott Vernon: Hey, good afternoon, guys. And thanks for being here. I just wanted to ask a question about the intermodal service, you know, can you give us some context or color around how the quantum product is performing that you guys announced a little while ago, and then with the shift over of the Mexican traffic from the KCS to Mexico to the FXC. I'm just wondering if you could just give us an update on how that transition is going? Has there been any impact on customer attrition or anything like that in the North-South trade? Thank you, Sure. So quantum.

David Scott Vernon: Hey, good afternoon, guys and thanks for fit me in here.

David Scott Vernon: Wanted to ask a question about within the intermodal service can you give us some context or color around how the quantum.

Speaker Change #107: <unk> is performing that you guys announced a little while ago and then with the shift over.

Speaker Change #107: The Mexican traffic from the case, you have to Mexico to the FX.

Speaker Change #108: I'm just wondering if you could just give us an update on how that transition is going has there been any impact on on customer attrition or anything like that in the north south great. Thank you.

David Vernon: Thank you.

Darren Field: Sure. So quantum. We're absolutely thrilled with the service performance. I think we're actually outpacing even expectations of our customers. Now that being said, the complexity of the networks and the decision point for a shipper to convert highway business that we would call. You know, cannot fail the kind of highway business that's not just inventory replenishment. It's a business-to-business transaction kind of move has probably been a little more complicated and a little slower than what we have anticipated. So, while our volume benefits from the quantum program have not yet been achieved. We're absolutely encouraged by what we're experiencing with the service, the feedback from the customers that are utilizing that service, and we're growing it every day.

Speaker Change #109: Sure so quantum.

Darren P. Field: We're absolutely thrilled with the service performance. I think we're actually outpacing the expectations of our customers. Now, that being said, the complexity of the networks and the decision point for a shipper to convert highway business that we would call, you know, cannot fail—the kind of highway business that's not just inventory replenishment.

Speaker Change #110: We're absolutely thrilled with the service performance I think we are actually outpacing even expectations of our customers now that being said the complexity of the networks and the decision point for a shipper to convert.

Speaker Change #111: The highway business that we would call.

Darren P. Field: It's a business to business transaction kind of move that has probably been a little more complicated and a little slower than we anticipated. So while our volume benefits from the quantum program have not yet been achieved, we're absolutely encouraged by what we're experiencing with the service, the feedback from the customers that are utilizing that service, and we're growing it every day. It hasn't grown as fast as we probably would have anticipated, but we've got a very long runway of opportunity to grow with the Quantum product, and we're thrilled with that.

Speaker Change #110: Yeah.

Cannot fail to kind of highway business, that's not just inventory replenishment, it's a business to business transaction kind of move has probably been a little more complicated and a little slower than what we have anticipated so while our volume benefits from the quantum.

Speaker Change #110: Graham have not yet been achieved we're absolutely encouraged by what we're experiencing with the service that feedback from the customers that are utilizing that service and we're growing it every day its it hasnt grown as fast as we probably would have been anticipated, but we've got a very very.

Darren Field: It's, it hasn't grown as fast as we probably would have anticipated, but we've got a very, very long runway of opportunity to grow with the quantum product, and we're thrilled with that.

Speaker Change #110: Long runway of opportunity to grow with the quantum product and we're thrilled with that as it relates to the announcement about the transition to <unk> from <unk>.

Darren Field: As it relates to the announcement about the transition to Pharaoh Max from CPKC at the beginning of the year, I think the transition was successful. Again, customers are clearly concerned about a transition like that, and maybe not everybody on day one converted with us at the pace that we would have probably liked to have seen that happen. As the year has gone on, we have had a lot of success at going and recovering business that maybe didn't transition with us. And hey, our volume swing on the Pharaoh Max was a material change in their network, and the BNSF's ability to serve Eagle Pass has been excellent.

Darren P. Field: As it relates to the announcement about the transition to Ferromax from CPKC at the beginning of the year, I think the transition was successful. Again, customers are clearly concerned about a transition like that, and maybe not everybody on day one converted with us at the pace that we would probably like to have seen that happen.

Speaker Change #110: <unk> at the beginning of the year.

Speaker Change #112: I think the transition was successful.

Speaker Change #112: Again customers are clearly concerned about a transition like that and maybe not everybody on day, one converted with us at.

Speaker Change #112: At the pace that we would have probably liked to have seen that happen as the year has gone on we have had a lot of success at Goldman and recurring business that may be didnt transition with us.

Darren P. Field: As the year has gone on, we have had a lot of success at going in and recovering business that maybe didn't transition with us. And hey, our volume swing on the FerroMax was a material change on their network. And BNSF's ability to serve Eagle Pass has been excellent, so we feel good about all three parties involved in that program. But certainly, the customer education around customs and all things related to the new terminals that we operate at with Ferromex was an education, and that took a little longer and probably didn't result in quite as much transition to our network immediately.

Speaker Change #113: And hey, our volume swing on deferral Max was a material change in their network and the BNS staffs ability to serve Eagle pass has been excellent. So we feel good about all three parties involved in that program.

Darren Field: So we feel good about all three parties involved in that program, but certainly the customer education around customs and all things related to the new terminals that we operate at with Pharaoh Max was an education and that has taken a little longer and probably didn't result in quite as much transition to our network immediately. But again, as the year has gone on, I feel good about where we're at today, and there's more work to be done to grow our presence in Mexico as the year moves on.

Speaker Change #112: But certainly the customer education around customs and all things related to the new terminals that we operate at with Ferro Max wasn't education and that that has taken a little longer and probably didn't result in quite as much transition to our network immediately but again.

Darren P. Field: But again, as the year's gone on, I feel good about where we are today, and there's more work to be done to grow our presence in Mexico as the year moves on. And that concludes our question and answer session. I will now turn the conference back to Ms. Shelley Simpson for closing remarks. Thank you.

Speaker Change #112: As the years gone on and I feel good about where we're at today and there is more work to be done to grow.

Speaker Change #112: Our presence in Mexico is as the year moves on.

Shelley Simpson: And that concludes our question-and-answer session.

Speaker Change #112: And that concludes our question and answer session I will now turn the conference back to MS. Shelley Simpson for closing remarks.

Shelley Simpson: I will now turn the conference back to Ms. Shelley Simpson for closing remarks. Thank you. And thanks for joining our call. You heard us talk about our challenges in the business. And although we're pleased with the relative performance, we're not pleased with our own expectations. We've seen pressure from our customers at cost in all of our businesses. Pricing largely been reset through bid season for our transactional businesses. Intermodal ICS and JVT and that pricing will largely be a place until we complete this season midway through 2025.

Shelley Simpson: And thanks for joining our call. You've heard us talk about our challenges in the business. And although we're pleased with the relative performance, we're not pleased with our own expectations. We've seen pressure from our customers, and increased costs in all of our businesses. Pricing has largely been reset through bid season for our transactional businesses in Intermodal, ICS, and JBT, and that pricing will largely be in place until we complete the bid season midway through 2025.

Speaker Change #114: Thank you and thanks for joining our call you've heard us talk about our challenges in the business and although we're pleased at the relative performance, we're not pleased with our own expectations, we've seen pressure from our customers our costs in all of our businesses pricing has largely been reset through bid season for our transactional businesses in intermodal Ics and JBT.

Speaker Change #112: And that pricing will largely be in place until we complete the season midway through 2025.

Shelley Simpson: And during this freight recession, we've invested in our foundations of our people, our technology, and our capacity, and that's really been preparing for a long-term opportunity to grow with our customers. And we're encouraged in a few areas. Our DCS and final mile businesses have fared very well in this recession. I am pleased with the margin performance and the resiliency of our DCS business and the improvement in our final mile business on both profit and return. We're also encouraged by our pipeline and the conversations we're having with customers around our growth plan and our peak planning. And finally, I am very pleased with our people.

Shelley Simpson: And during this break recession, we've invested in the foundations of our people and our technology and our capacity. And that's really been preparing for a long-term opportunity to grow with our customers. And we're encouraged in a few areas. Our DCS and bottom-up businesses have fared very well in this recession. I am pleased with the market performance and the resiliency of our DCS. We've been preparing for a long-term opportunity to grow with our customers. And we're encouraged in a few areas. Our DCS and bottom-up businesses have fared very well in this recession. I am pleased with the market performance and the resiliency of our DCS.

Speaker Change #112: Enjoying this freight recession, we've invested in our foundations of our people and our technology and our capacity and Thats really been preparing for a long term opportunity to grow with our customers and we're encouraged in a few areas. Our dcs in final mile businesses have fared very well in this recession I am pleased with the margin performance and.

Speaker Change #112: The resiliency of our Dcs business and the improvement in our final mile business saw good profit and returns.

Shelley Simpson: DCS business and the improvement in our final mile business on both profits and returns. Our customer demand is returning back to something more seasonal that we can be better at predicting to pre-pandemic levels. And that gives us more confidence as we're looking at big compliance better between 80% and 90% in both in modal and JVT. And that means our customers are doing a better job predicting their consistent volumes. We're also encouraged with our customers.

Speaker Change #112: Our customer demand is returning back to something more seasonal that we can be better at predicting to pre pandemic levels and that gives us more confidence as we're looking at bid compliance better between 80 and 90% in both intermodal and JBT and that means our customers are doing a better job predicting that.

Speaker Change #112: System volumes.

Speaker Change #112: We're also encouraged with our pipeline and the conversations we're having with customers around our growth plan and our peak planning.

Shelley Simpson: And the conversations we're having with customers around our growth plan and our peak planning, and finally very pleased with our people. There's 33,000 of our people working hard every day to deliver on the expectations of our customers and our shareholders. We're going to continue to focus on controlling our costs. We will provide best-in-class service. We're going to maintain our excellence and safety, and we'll create value for customers. And that's what sets us up for growth. That scales our investments, and it allows us to create long-term value for our people and our shareholders. Thank you for your comments and your interest on the call.

Shelley Simpson: There are 33,000 of our people working hard every day to deliver on the expectations of our customers and our shareholders. We're going to continue to focus on controlling our costs. We will provide best-in-class service. We will maintain our excellence and safety, and we will create value for customers. And that's what sets us up for growth. That scales our investments, and it allows us to create long-term value for our people and our shareholders.

Speaker Change #112: And finally very pleased with our people. There is 33000 of our people working hard every day to deliver on the expectations of our customers and our shareholders.

Speaker Change #112: We're going to continue to focus on controlling our costs. We will provide best in class service, we're going to maintain our excellence in safety and will create value for customers and that's what sets us up for growth that scales, our investments and it allows us to create long term value for our people and our shareholders.

Shelley Simpson: Thank you for your comments and your interest in the call. We look forward to speaking with you next quarter. And, ladies and gentlemen, this concludes today's call, and we thank you for your participation. You may now disconnect.

Speaker Change #115: Thank you for your comments and your interest on the call. We look forward to speaking with you next quarter.

Unknown Executive: We look forward to speaking with you next quarter.

Speaker Change #112: Okay.

Unknown Executive: And ladies and gentlemen, this concludes today's call, and we thank you for your participation. You may now disconnect.

Speaker Change #116: And ladies and gentlemen, this concludes today's call and we thank you for your participation you may now disconnect.