Q4 2024 ArcBest Corp Earnings Call

Earnings Conference call all lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like to ask a question during that time simply press Star then the number one on your telephone keypad to withdraw your question Press Star One again, we kindly ask that you limit yourself to.

Speaker Change: One question and return to the queue for any follow ups I would now like to turn the conference over to Amy Mendenhall, Vice President Treasury and Investor Relations. Please go ahead.

Judy Mcreynolds: Good morning, everyone I am pleased to be here today, with Judy Mcreynolds, our chairman and CEO.

Speaker Change: Runs are our president and Matt Beasley, our Chief Financial Officer. Other members of our executive leadership team will also be available during the Q&A session.

Speaker Change: Four we begin please note that some of the comments we make today will be forward looking statements. These statements are subject to risks and uncertainties, which are detailed in the forward looking section of our earnings release and SEC filings to provide meaningful comparisons. We will also discuss certain non-GAAP financial measures. These men.

Speaker Change: <unk> are outlined and described in the tables of our earnings release reconciliations of GAAP to non-GAAP measures are provided in the additional information section of the presentation slides.

Judy Mcreynolds: You can access the conference call slide deck on our website at <unk> Dot Com and our 8-K filed earlier this morning or follow along on the webcast and now I will turn the call over to Judy.

Judy Mcreynolds: Thank you Amy and good morning, everyone.

Judy Mcreynolds: Despite a challenging freight environment in 2024, we remain focused on executing our strategy to create value for our shareholders.

Judy Mcreynolds: Customers and ensuring we are well positioned to capture growth when the market turns.

Judy Mcreynolds: At our best we believe in a win win approach providing premium value to our customers, which in turn benefits our business.

Judy Mcreynolds: With our comprehensive suite of integrated services arc best it's more than just a transportation provider. We are an innovative strategic partner for our customers our.

Judy Mcreynolds: Our decisions are always customer led and our entire team is dedicated to listening and crafting solutions to meet our customers' unique needs.

Judy Mcreynolds: Supply chains are becoming more complex and most shippers use a mix of mode to keep their supply chains moving.

Judy Mcreynolds: Art Best managed transportation solutions seamlessly connects these mode to build better supply chains, driving improved customer retention and profitability.

Judy Mcreynolds: Our supply chain modernize and customers seek efficiencies.

Judy Mcreynolds: Man for better shipment visibility is growing.

Judy Mcreynolds: We have invested significantly in this area to provide the industry, leading visibility enhancing trusts and enabling customers to make more informed decisions based on real time data.

Our industry, leading efforts are being recognized as evidenced by Mascio ranking ABF number one in the industry for the most useful websites and number two in the industry for proactive communications.

Judy Mcreynolds: Additionally, our ongoing service enhancements have reduced customer service request by 20% decreasing operating expenses.

Judy Mcreynolds: And we're constantly improving.

Judy Mcreynolds: Look forward to sharing more about our new platform will be publicly launching in a few months.

Judy Mcreynolds: Excellence is one of our best core values delivering a premium experience for our customers requires excellent execution from our team every day in.

Judy Mcreynolds: In 2024, we upheld this core value by training nearly 5000 employees on our quality process.

Judy Mcreynolds: <unk> operational teams to enhance execution launching multiple technology projects and investing in our fleet and facilities.

Judy Mcreynolds: We also lead in innovative value enhancing solutions to improve L. T O margins and capacity utilization, including shipment level cost visibility dynamic pricing and space based pricing.

Judy Mcreynolds: This allows ABF to select the shipments that best leverage the ABF network and is a key reason why we have the strongest asset based LCL pricing metrics among public competitors.

Judy Mcreynolds: Our full year ABF non-GAAP operating ratio for 2024 was 91, 2%, marking a 670 basis point improvement since 2016.

Judy Mcreynolds: I will note our operating ratio includes approximately 600 basis points and union pension costs.

Judy Mcreynolds: Adjusting for those costs, our operating ratio compares very favorably to our peers.

Judy Mcreynolds: While we've made tremendous progress we recognize there is more to be done.

Judy Mcreynolds: Two weeks ago, we announced a series of leadership and organizational updates across the business, reflecting our commitment to continuous improvement and innovation.

Judy Mcreynolds: I'm confident that we have the right team in place to advance our strategic priorities and drive sustainable long term growth are.

Judy Mcreynolds: Our president Seth runs or will cover those changes in more detail.

Before I turn it over to him I'd like to thank Steven Leonard who recently announced his retirement for his 24 years of service.

Judy Mcreynolds: Stephen has been a key part of our best transformation into an integrated logistics company. He will be greatly missed when he retires later this year.

Judy Mcreynolds: And now I'll turn it over to Seth to outline our key focus areas for 2025.

Stephen has been a key part of our best transformation into an integrated logistics company. He will be greatly missed when he retires later this year.

Seth: Thanks, Judy and good morning, everyone as I stepped into my new role I embarked on a listening tour across our company engaging with employees to identify barriers to growth and opportunities to streamline our business.

And now I'll turn it over to Seth to outline our key focus areas for 2025.

Seth: This experience has further strengthened my conviction in our strategy our people and our customers consistently tell me that our best uniquely positioned to help navigate disruptions and build better supply chains with our comprehensive suite of integrated solutions and.

Seth: Thanks, Judy and good morning, everyone as I stepped into my new role I embarked on a listening tour across our company engaging with employees to identify barriers to growth and opportunities to streamline our business. This experience has further strengthened my conviction in our strategy our people and our customers consistent.

Seth: In 2025, our focus is on enhancing execution and driving profitable growth.

Seth: To start we recently announced some organizational changes designed to remove barriers to growth enable faster decision, making and foster better collaboration.

Seth: Tell me that our best is uniquely positioned to help navigate disruptions and build better supply chains with our comprehensive suite of integrated solutions in 2025, our focus is on enhancing execution and driving profitable growth.

Eddie: Across key areas of the business Eddie.

Eddie: <unk> has been named Chief commercial officer, and will lead an expanded commercial organization aligning our revenue engine across teams like sales marketing yield and customer solutions all under one leader. Additionally.

Seth: Dart, we recently announced some organizational changes designed to remove barriers to growth enable faster decision, making and foster better collaboration across key areas of the business.

Eddie: Additionally, Christopher Atkins has been appointed Chief strategy Officer.

Seth: <unk> has been named Chief commercial officer, and will lead an expanded commercial organization aligning our revenue engine across teams like sales marketing yield and customer solutions all under one leader. Additionally.

Eddie: Under his leadership, we will centralize our strategy management and data science teams. This team will advance our highest priority initiatives and work to further streamline processes and enhance productivity.

Seth: Additionally, Christopher Atkins has been appointed Chief strategy Officer.

Eddie: We are also invest in our sales force to ensure we have the right resources to manage customer relationships and grow new business. We are expanding our presence within the small and middle market segments, which presents a significant growth opportunity.

Speaker Change: Under his leadership, we will centralize our strategy management and data science teams. This team will advance our highest priority initiatives and work to further streamline processes and enhance productivity.

Eddie: In 2024, we achieved a 55% increase in our overall pipeline and we have a clear plan in place to accelerate this even further.

Speaker Change: We are also investing in our sales force to ensure we have the right resources to manage customer relationships and grow new business. We are expanding our presence within the small and middle market segments, which presents a significant growth opportunity.

Eddie: Moreover, we are enhancing customer service to improve customer retention, including expanding the dedicated teams that support our top customers and developing onboarding teams for new customers over 80% of our customers have been doing business with us for over 10 years, and we will continue providing the personalized and <unk>.

Speaker Change: In 2024, we achieved a 55% increase in our overall pipeline and we have a clear plan in place to accelerate this even further.

Speaker Change: Moreover, we are enhancing customer service to improve customer retention, including expanding the dedicated teams that support our top customers and developing onboarding teams for new customers over 80% of our customers have been doing business with us for over 10 years, and we will continue providing the personalized and <unk>.

Eddie: Exceptional service these customers have come to expect from us.

Eddie: Disciplined execution remains a cornerstone of our approach we made significant progress on cost improvement in 2024, and we will continue to focus on further improvements in 2025.

Eddie: We reached a multiyear high for employee productivity last year and will drive further improvements through optimization innovation and training.

Speaker Change: Exceptional service these customers have come to expect from us.

Speaker Change: Disciplined execution remains a cornerstone of our approach we made significant progress on cost improvement in 2024, and we will continue to focus on further improvements in 2025.

Eddie: We have deployed training and compliance teams to 15 facilities, resulting in $12 million in savings.

Eddie: We plan for this team to visit additional facilities in 2025 with the roadmap extending through mid 2026 to achieve further gains.

Speaker Change: We reached a multiyear high for employee productivity last year and will drive further improvements through optimization innovation and training we.

Eddie: In 2025, we will accelerate the optimization of our operation by harnessing the power of responsible AI and machine learning to enhance our employees' ability to make quicker better informed decisions.

Speaker Change: We have deployed training and compliance teams to 15 facilities, resulting in $12 million in savings. We plan for this team to visit additional facilities in 2025 with a roadmap extending through mid 2026 to achieve further gains.

In 2024, we laid the groundwork with projects like the initial phase of our city route optimization project and AI assisted appointment scheduling and truckload quote augmentation tools.

Speaker Change: In 2025, we will accelerate the optimization of our operation by harnessing the power of responsible AI and machine learning to enhance our employees' ability to make quicker better informed decisions.

Eddie: This year, we will build on that foundation advancing demand forecasting and route optimization to drive ongoing cost savings and service improvements.

Speaker Change: 2024, we laid the groundwork with projects like the initial phase of our city route optimization project and AI assisted appointment scheduling and truckload quote augmentation tools. This year, we will build on that foundation advancing demand forecasting and route optimization to drive ongoing cost savings and service.

Eddie: Our focus on cost and productivity, that's help mitigate inflationary headwinds in areas, such as insurance and health care and we continue to review our operations to identify areas, where we can streamline processes and enhanced productivity.

Eddie: As we accelerate into our next century with excellence, we will achieve success through purposeful collaboration by driving innovation, moving with urgency and providing customers with premium service, we will strengthen our financial position and ensure we are well prepared to meet the evolving needs of customers and capitalize on market opportunities.

Speaker Change: Improvements.

Speaker Change: Our focus on cost and productivity, that's helped mitigate inflationary headwinds in areas, such as insurance and health care and we continue to review our operations to identify areas, where we can streamline processes and enhanced productivity.

Speaker Change: As we accelerate into our next century with excellence, we will achieve success through purposeful collaborations by driving innovation, moving with urgency and providing customers with premium service, we will strengthen our financial position and ensure we are well prepared to meet the evolving needs of customers and capitalize on market opportunities.

Eddie: <unk> I'll now turn it over to Matt to go through the financials in greater detail.

Thank you Seth and good morning, everyone.

Eddie: <unk> thousand 24 was a year marked by a sluggish industrial economy, and a challenging truckload market.

Eddie: Despite these headwinds our team's resilience and our strategic initiatives enabled us to navigate these challenges and deliver solid financial results.

Speaker Change: <unk> I will now turn it over to Matt to go through the financials in greater detail.

Matt: Thank you Seth and good morning, everyone.

Eddie: I am pleased to report that in 2024, we achieved our third best revenue and fourth best non-GAAP operating income in company history.

Speaker Change: 2024 was a year marked by a sluggish industrial economy, and a challenging truckload market.

Speaker Change: Despite these headwinds our team's resilience and our strategic initiatives enabled us to navigate these challenges and deliver solid financial results.

Eddie: Turning to our fourth quarter results.

Eddie: Consolidated revenue decreased by 8% from last year's fourth quarter to $1 billion.

Speaker Change: I am pleased to report that in 2024, we achieved our third best revenue and <unk>.

Eddie: non-GAAP operating income from continuing operations was $41 million.

Speaker Change: First non-GAAP operating income in company history.

Eddie: Compared to $82 million in the prior year.

Speaker Change: Turning to our fourth quarter results.

Eddie: Our asset based segment saw $35 million decrease in non-GAAP operating income, while the asset light segments non-GAAP operating loss of $6 million.

Speaker Change: Consolidated revenue decreased by 8% from last year's fourth quarter to $1 billion.

Speaker Change: non-GAAP operating income from continuing operations was $41 million.

Eddie: Was $5 million worse than the prior year.

Eddie: Adjusted earnings per share were $1 33 down from $2 47 in.

Speaker Change: Compared to $82 million in the prior year.

Speaker Change: Our asset based segment saw $35 million decrease in non-GAAP operating income, while the asset light segments non-GAAP operating loss of $6 million was $5 million worse than the prior year adjusted.

Eddie: In the fourth quarter of 2023.

Eddie: Now, let's discuss our two segments in more detail.

Starting with our asset based business.

Eddie: Fourth quarter revenue was $656 million or.

Speaker Change: Adjusted earnings per share were $1 33 down from $2 47.

Eddie: Per day decrease of 8%.

Eddie: Abf's non-GAAP operating ratio was 92% an increase of 430 basis points over the exceptionally strong performance in the fourth quarter of 2023, which was driven by additional business at higher prices. Following the cyber attack on a competitor the tightened market capacity.

Speaker Change: In the fourth quarter of 2023.

Speaker Change: Now, let's discuss our two segments in more detail.

Speaker Change: Starting with our asset based business.

Speaker Change: Fourth quarter revenue was $656 million or.

Speaker Change: Per day decrease of 8%.

Speaker Change: Abf's non-GAAP operating ratio was 92% an increase of 430 basis points over the exceptionally strong performance in the fourth quarter of 2023, which was driven by additional business at higher prices. Following the cyber attack on a competitor that tightened market capacity.

Eddie: Ags non-GAAP operating ratio increased 100 basis points sequentially, which was on the lower end of the historical range of a 100 to 200 basis point increase.

Eddie: And with Abf's 2024 operating ratio of 91, 2% our union employees qualified for a 1% profit sharing bonus payout.

Speaker Change: Ags non-GAAP operating ratio increased 100 basis points sequentially, which was on the lower end of the historical range of a 100 to 200 basis point increase.

Eddie: In the fourth quarter daily shipment saw a decline of 1% year over year, while weight per shipment decreased by 6%, resulting in a 7% decrease in tons per day compared to the previous year.

Speaker Change: And with Abf's 2024 operating ratio of 91, 2% our union employees qualified for a 1% profit sharing bonus payout.

Eddie: This decline is primarily due to industrial weakness as customers are producing less and the current economic environment.

Speaker Change: In the fourth quarter daily shipment saw a decline of 1% year over year, while weight per shipment decreased by 6%, resulting in a 7% decrease in tons per day compared to the previous year.

Eddie: Additionally, higher interest rates and low housing inventory of led to fewer household goods moves, which typically involve heavier shipments.

Eddie: Some highway LTE shipments have also shifted to the truckload market with its continued low rates and excess capacity.

Speaker Change: This decline is primarily due to industrial weakness as customers are producing less and the current economic environment.

Speaker Change: Additionally, higher interest rates and low housing inventory has led to fewer household goods moves, which typically involve heavier shipments.

Eddie: Despite lower tonnage levels the volume of shipments remained relatively stable.

Which meant that labor costs didn't scale proportionately to tonnage declines.

Speaker Change: Some highway LTR shipments have also shifted to the truckload market with its continued low rates and excess capacity.

Eddie: However, improved productivity through technology and training helped mitigate costs, while maintaining high service standards.

Speaker Change: Despite lower tonnage levels the volume of shipments remained relatively stable, which meant that labor costs didn't scale proportionately to tonnage declines.

Eddie: Cost for fuel repairs and purchase transportation were all lower on a year over year basis, but insurance related costs increased by $9 million, adding 160 basis points to our operating ratio year over year.

Speaker Change: However, improved productivity through technology and training helped mitigate costs, while maintaining high service standards.

Eddie: We secured an average increase of four 5% on our contract renewals and deferred pricing agreements during the quarter.

Speaker Change: As for fuel repairs and purchase transportation were all lower on a year over year basis, but insurance related costs increased by $9 million.

Eddie: Revenue per hundredweight increased by less than 1% in the fourth quarter compared to the strong fourth quarter of 2023 when revenue per hundredweight increased 7% as a result of the previously mentioned market disruption.

Speaker Change: Adding 160 basis points to our operating ratio year over year.

Speaker Change: We secured an average increase of four 5% on our contract renewals and deferred pricing agreements during the quarter.

Eddie: Price improvements have been partially offset by decline in fuel costs.

Speaker Change: Revenue per hundredweight increased by less than 1% in the fourth quarter compared to the strong fourth quarter of 2023 when revenue per hundredweight increased 7% as a result of the previously mentioned market disruption.

Eddie: <unk> fuel surcharges revenue per hundredweight increase in the mid single digits year over year.

Eddie: The pricing environment remains rational and we're focused on using pricing and operational efficiency improvements to outpace rising costs and enhance our margins.

Speaker Change: Price improvements have been partially offset by decline in fuel costs.

Eddie: In January 2025, our best asset base segment experienced lower tonnage and shipment levels compared to the same period last year.

Speaker Change: Excluding fuel surcharges <unk> revenue per hundredweight increased in the mid single digits year over year.

Speaker Change: The pricing environment remains rational and we are focused on using pricing and operational efficiency improvements to outpace rising costs and enhance our margins.

Eddie: As the freight environment remains soft and truckload prices remain low we continue to see a reduction in heavier weight <unk> shipments and fewer household goods moves which contribute to a lower weight per shipment, but a higher revenue per hundredweight.

Speaker Change: In January 2025, our best asset based segment experienced lower tonnage and shipment levels compared to the same period last year.

Eddie: January was also impacted by winter weather conditions with ABF experiencing the highest number of service center closures since 2014.

Speaker Change: As the freight environment remains soft and truckload prices remain low we continue to see a reduction in heavier weight <unk> shipments and fewer household goods moves which contribute to a lower weight per shipment, but a higher revenue per hundredweight.

Eddie: Excluding pandemic affected periods the average sequential change in ABS operating ratio from the fourth quarter to the first quarter over the past decade as typically range from an increase of 350 to 400 basis points.

Speaker Change: January was also impacted by winter weather conditions with ABF experiencing the highest number of service center closures since 2014.

Even with the winter weather, we experienced in January we expect our first quarter operating ratio increase to stay within the historical range.

Speaker Change: Excluding pandemic affected periods the average sequential change in ABS operating ratio from the fourth quarter to the first quarter over the past decade as typically range from an increase of 350 to 400 basis points.

Eddie: Moving on to the asset light segment.

Eddie: Fourth quarter revenue was $375 million of.

Eddie: Daily decrease of 9% year over year.

Speaker Change: Even with the winter weather, we experienced in January we expect our first quarter operating ratio increase to stay within the historical range.

Eddie: Shipments per day were down 2% and revenue per shipment decreased by 7% due to the soft freight market and growth in our managed business, which has smaller shipments items and lower revenue per shipment levels.

Speaker Change: Moving on to the asset light segment.

Speaker Change: Quarter revenue was $375 million.

While we maintained our focus on reducing costs and improving employee productivity.

Speaker Change: A daily decrease of 9% year over year.

Speaker Change: Shipments per day were down 2% and revenue per shipment decreased by 7% due to the soft rate market and growth in our managed business, which has smaller shipments items and lower revenue per shipment levels.

Eddie: The non-GAAP operating loss of $6 million shows that our business continues to be impacted by current market conditions.

Eddie: In January 2025 asset light year over year daily revenue was down 6% due to fewer shipments from winter weather and a strategic reduction in less profitable truckload volumes, which were offsetting the continued strength and managed.

Speaker Change: While we maintained our focus on reducing costs and improving employee productivity.

Speaker Change: The non-GAAP operating loss of $6 million shows that our business continues to be impacted by current market conditions.

Eddie: Lower revenue per shipment resulted from soft freight market conditions, and a higher proportion of managed business with smaller shipment sizes.

Speaker Change: In January 2025 asset light year over year daily revenue was down 6% due to fewer shipments from winter weather and a strategic reduction in less profitable truckload volumes, which are offsetting the continued strength and managed.

Eddie: Given current market conditions, we anticipate our non-GAAP operating loss for the segment between $4 million 6 million for the first quarter of 2025.

Speaker Change: Lower revenue per shipment resulted from soft freight market conditions, and a higher proportion of managed business with smaller shipment sizes.

Eddie: Our asset light offerings play an important role in our overall strategy as customers seek long term logistics partners for all their transportation needs we can.

Speaker Change: Given current market conditions, we anticipate our non-GAAP operating loss for the segment between $4 million 6 million for the first quarter of 2025.

Eddie: Continue to better align resources to match business levels, and we are maintaining our pricing discipline.

Eddie: These initiatives are a top priority as we focus on returning the asset light segment to profitability.

Speaker Change: Our asset light offerings play an important role in our overall strategy as customers seek long term logistics partners for all their transportation needs.

Eddie: I'll now turn to our long term balanced approach to capital allocation.

Speaker Change: We continue to better align resources to match business levels, and we are maintaining our pricing discipline.

Eddie: In 2024, we invested in that $288 million in capital expenditures, including adding capacity to our network and investing in our fleet.

Speaker Change: These initiatives are a top priority as we focus on returning the asset light segment to profitability.

Eddie: These investments enable growth improve service and increase efficiencies across our network.

Speaker Change: I'll now turn to our long term balanced approach to capital allocation.

Eddie: Our 2025 capital expenditures are estimated to range from $225 million to $275 million, primarily for revenue equipment and real estate.

Speaker Change: In 2024, we invested a net $288 million in capital expenditures, including adding capacity to our network and investing in our fleet.

Speaker Change: These investments enable growth improve service and increase efficiencies across our network.

Eddie: We also returned over $85 million to shareholders in 2024 through both share repurchases and dividends.

Speaker Change: Our 2025 capital expenditures are estimated to range from $225 million to $275 million.

Eddie: We will act opportunistically on share repurchases based on share price balancing organic capital investments, while maintaining reasonable leverage levels.

Speaker Change: Primarily for revenue equipment and real estate.

Speaker Change: We also returned over $85 million to shareholders in 2024 through both share repurchases and dividends.

Eddie: Our balance sheet remains strong and we have approximately $450 million in available liquidity.

Eddie: We look forward to building on our momentum in 2025, and we remain focused on delivering strong results.

Speaker Change: We will act opportunistically on share repurchases based on share price balancing organic capital investments, while maintaining reasonable leverage levels.

Speaker Change: I am confident that the strategic initiatives and leadership changes Seth discussed.

Speaker Change: Our balance sheet remains strong and we have approximately $450 million in available liquidity.

Speaker Change: To drive our continued success and position us well for future growth.

Judy Mcreynolds: I'll now hand, the call back to Judy.

Speaker Change: We look forward to building on our momentum in 2025, and we remain focused on delivering strong results.

Judy Mcreynolds: Thank you Matt our people are at the heart of our success and our ongoing investment in them as a key enabler in reaching our goal.

Speaker Change: I am confident that the strategic initiatives and leadership changes set discussed will drive our continued success and position us well for future growth.

Judy Mcreynolds: We are especially proud to be recognized as one of America's best large employers by Forbes one of the best companies to work for by U S News and World report and for the 15th consecutive year, we have been named among the training Apex Award winners.

Judy: I'll now hand, the call back to Judy.

Judy: Thank you Matt.

Judy: People are at the heart of our success and our ongoing investment in them as a key enabler in reaching our goals.

Judy: We are especially proud to be recognized as one of America's best large employers by Forbes one of the best companies to work for by U S News and World report and for the 15th consecutive year, we have been named among the training Apex Award winners.

Judy Mcreynolds: Want to extend my heartfelt thanks to all our best employees for their unwavering commitment to continuous improvement and exceptional customer service they.

Judy Mcreynolds: The adaptability and grit our team demonstrates every day makes me incredibly proud.

Judy Mcreynolds: That concludes our prepared remarks, I'll turn it over to the operator for questions.

Judy: I want to extend my heartfelt thanks to all our best employees for their unwavering commitment to continuous improvement and exceptional customer service.

Speaker Change: At this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad, we kindly ask that you limit yourself to one question and return to the queue for any follow ups. Our first question will come from the line of Jason Seidl with PD Cowen. Please go ahead.

Judy: <unk> ability and grit our team demonstrates every day makes me incredibly proud.

Judy: That concludes our prepared remarks, I'll turn it over to the operator for questions.

Speaker Change: At this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad, we kindly ask that you limit yourself to one question and return to the queue for any follow ups. Our first question will come from the line of Jason Seidl with TD Cowen. Please go ahead.

Jason Seidl: Thank you operator, good morning, Judy and team.

Speaker Change: Real quickly when we're looking at the sequential or movements that you've talked about for the asset based business.

Speaker Change: It's nice to see that youre going to stay within the range sort of what are the things that you're doing to offset the weather and then I have a just a quick follow up.

Jason Seidl: Thank you operator, good morning, Judy and team.

Speaker Change: Yeah.

Jason Seidl: Real quickly when we're looking at the sequential or movements that you've talked about for the asset based business.

Speaker Change: Yeah, Hey, good morning, Jason So certainly.

Speaker Change: We see continued improvements from the productivity and efficiency work that we've been doing.

It's nice to see that youre going to stay within the range sort of what are the things that you're doing to offset the weather and then I have a just a quick follow up.

Speaker Change: Saw some lower purchase transportation expenses as we move sequentially quarter to quarter and then we also have annual incentive plans both from our Union and nonunion employees, we adjust those on a quarterly basis, just based on our performance and there was also some impact in the quarter from that as well.

Jason Seidl: Yeah, Hey, good morning, Jason So certainly we see continued improvements from the productivity and efficiency work that we've been doing.

Speaker Change: Awesome lower purchase transportation expenses, as we move sequentially quarter to quarter and then we also have annual incentive plans both from our for our Union and Nonunion employees, we adjust those on a quarterly basis, just based on our performance and there was also some impact in the quarter from that as well.

Speaker Change: Okay.

Speaker Change: And then my quick follow up here is when I look at pricing you guys talked about a rational pricing environment. When I look if I look at your sort of trend here on price increases. If you go back to fourth quarter of 'twenty three it's five six and five <unk> and five 1 million and $4. Six now we're hearing <unk> five still a decent pricing.

Jason Seidl: Okay.

Jason Seidl: Then my quick follow up here is when I look at pricing you guys talked about a rational pricing environment look if I look at your sort of trend here on price increases. If you go back to fourth quarter of 'twenty three it's five six and $5 three and five 1 million and $4. Six now we're hearing for five still a decent price increase.

Speaker Change: <unk>, but the trend obviously is downward can you talk to that and are you seeing any pressures in the marketplace due to sort of a sluggish freight environment.

Hey, Jason Good morning. This is Christopher I would say I would characterize the fourth quarter pricing result is in line with the third quarter, we continued to maintain discipline, there and making sure that we're securing increases and working on our efficiency to offset the inflationary pressures that we face from a cost basis. So continue to see a rash.

Jason Seidl: But the trend obviously is downward can you talk to that and are you seeing any pressures in the marketplace due to sort of a sluggish freight environment.

Jason Seidl: Hey, Jason Good morning. This is Christopher I would say I would characterize the fourth quarter pricing result is in line with the third quarter, we continued to maintain discipline, there and making sure that we're securing increases in working on our efficiency to offset the inflationary pressures that we.

Speaker Change: The environment, there I wouldn't say, we've seen any more pressure in.

Speaker Change: In recent months and we have throughout the year and then looking back at the full year of 2024, we achieved a four 9% increase which if you compare that to the 20 year period Thats a top five result, so really proud of the team for that result, and if you think about the just the freight recession, we've been in for the last several years I think thats a testing.

Jason Seidl: From a cost basis, so continue to see a rational environment. There I wouldn't say, we've seen any more pressure.

Jason Seidl: In recent months and we have throughout the year and looking back at the full year of 2024, we achieved a four 9% increase which if you compare that to the 20 year period Thats a top five years old so really proud of the team for that result, and if you think about just the great recession, we've been in for the last several years I think that's a test.

Speaker Change: But to just the service that the ABF team have delivered that our customers appreciate the value and are willing to pay for it.

Speaker Change: That's helpful response, and I appreciate the time as always guys.

Jason Seidl: Thank you Jason.

Speaker Change: Our next question comes from the line of Daniel <unk> with Stephens. Please go ahead.

Jason Seidl: <unk> two just a service that ABF team has delivered that our customers appreciate the value and are willing to pay for it.

Daniel: Hey, good morning, everybody. Thanks for taking my questions.

Daniel: I wanted to ask maybe another one on the or seasonality heading into <unk> here I guess in the fourth quarter. I think you guys probably had a benefit from an unwanted the accrual from the bonus payout I think in the script you mentioned you pay at a 1%.

Jason Seidl: That's helpful response, and I appreciate the time as always guys.

Speaker Change: Thank you Jason.

Speaker Change: Our next question comes from the line of Daniel <unk> with Stephens. Please go ahead.

Speaker Change: Hey, good morning, everybody. Thanks for taking my questions.

Daniel: Bonus, but you were tracking towards the 2% through the third quarter. So I guess could you help quantify what that or tailwind was in the fourth quarter. If there was one and then Matt I guess in that context, I would think that's a tailwind to <unk> that makes it a harder comp in <unk>. If you start accruing at a 2% rate again, so I guess what are the offset there for you to add any more color on how we should think about.

Speaker Change: I wanted to ask maybe another one on the or seasonality heading into <unk> here I guess in the fourth quarter. I would think you guys probably had a benefit from an unwind of the accrual from the bonus pay out I think in the script you mentioned you pay at a 1%.

Bonus, but you were tracking towards the 2% through the third quarter. So I guess could you help quantify what that Omar tailwind was in the fourth quarter. If there was one and then Matt I guess in that context, I would think that's a tailwind to <unk> that makes it a harder comp in <unk>. If you start accruing at a 2% rate again, so I guess what are the offset there for you to add any more color around how we should think about.

Daniel: That bonus impact on the or.

Daniel:

Daniel: Hey, Good morning, Daniel This is Matt so.

Daniel: Like I mentioned, we do have a number of different plans, including executive plans, if we adjust on a quarterly basis.

Daniel: True it up just based on performance, including the operational results and then of course the stock performance over the time period. So I don't have an exact number for you certainly there was some impact there.

That bonus impact on the or.

Matt: Hey, Good morning, Daniel This is Matt so.

Matt: Like I mentioned, we do have a number of different plans, including executive plans that we adjust on a quarterly basis.

Daniel: In the fourth quarter.

Daniel: And then as you look on the.

Matt: True it up just based on performance, including the operational results and then of course the stock performance over the time period. So I don't have an exact number for you certainly there was some impact there.

Daniel: Shipment side, and just kind of the revenue side fourth quarter to first quarter. We are encouraged certainly there were a number of weather days that we had in January like I mentioned, the highest number that we've seen since 2014, but on the days that we werent weather impacted I think we were encouraged by the trends there and so we're hopeful that we'll see some improvements.

Matt: In the fourth quarter.

Matt: Then as you look on the.

Matt: Shipment side, and just kind of the revenue side fourth quarter to first quarter. We are encouraged certainly there were a number of weather days that we had in January like I mentioned, the highest number that we've seen since 2014, but on the days that we werent weather impacted I think we were encouraged by the trends there and so we're hopeful that we'll see some improvements.

Daniel: Sequentially.

Daniel: On the revenue side.

Daniel: Versus what our historical seasonality would look like.

Daniel: Okay and anyway, we're talking about the bonus accrual in 2005, if you paid one should we expect that to be a headwind year over year.

Matt: <unk> there on the revenue side.

Daniel: I mean, we just have a typical process that we go through again across all incentive plans on our close process as we go move on a quarterly basis and so we would expect to true all of those plans up with expectations as we move through the year.

Matt: First versus what our historical seasonality would have would normally look like.

Matt: Okay and anyway, we're talking about the bonus accrual in 2005, if you paid one should we expect that to be a headwind year over year.

Matt: I mean, we just have a typical process that we go through again across all incentive plans on our close process as we go move on a quarterly basis and so we would expect to true all of those plans up with expectations as we move through the year.

Daniel: Thanks.

Speaker Change: Our next question comes from the line of Jordan <unk> with Goldman Sachs. Please go ahead.

Daniel: Yes, hi.

Speaker Change: Just sort of curious how youre thinking about yields on a revenue per hundredweight.

Speaker Change: <unk> got some tough comps ahead from from 2024 do you think that number with fuel can stay positive through the year. Thanks.

Matt: Thanks, Paul.

Matt: Our next question comes from the line of Jordan <unk> with Goldman Sachs. Please go ahead.

Speaker Change: Sure.

Speaker Change: Hey, good morning, Jordon. This is Christopher Yeah. That's definitely our goal is to remain positive. There obviously I just wanted to call back so that's a proxy for price.

Speaker Change: Yes, hi, just sort of curious how you're thinking about yields a revenue per hundredweight and you've got some tough comps ahead from from 2024 do you think that number with fuel can stay positive through the year. Thanks.

Speaker Change: There is other elements to pricing like we've talked about weight per shipment length of haul there's other factors as well.

Speaker Change: So as the mix plays out throughout the year as we have opportunities and our strong pipeline come on board.

Speaker Change: Hey, good morning, Jordon. This is Christopher yes, that's definitely our goal is to remain positive. There obviously I just wanted to call back so that's a proxy for price.

Speaker Change: We're very focused on making sure that new business that we bring on whether it's from bringing on new logos or whether it's from a growing with existing customers is profitable revenue per hundred weight is just one proxy there.

Speaker Change: Other elements to pricing like we've talked about weight per shipment length of haul there's other factors as well.

Speaker Change: So as the mix plays out throughout the year as we have opportunities and our strong pipeline come on board.

Speaker Change: But we really don't manage to that we manage to the profitable outcome that were <unk>.

Speaker Change: We're very focused on making sure that new business that we bring on whether it's from bringing on new logos or whether it's from a growing with existing customers is profitable.

Speaker Change: Netting out.

Speaker Change: Thank you.

Speaker Change: Your next question comes from the line of Ravi Shanker with Morgan Stanley. Please go ahead.

Speaker Change: Revenue per hundred weight is just one proxy there, but we really don't manage to that we manage to the profitable outcome that we're setting out.

Speaker Change: Great. Thanks morning, everyone, maybe just a big picture question I mean, we've heard from some of the PL company you kind of obviously.

Speaker Change: <unk> was a pretty good peak season, and maybe some momentum continuing into <unk>.

Speaker Change: Thank you.

Speaker Change: The next question comes from the line of Ravi Shanker with Morgan Stanley. Please go ahead.

Speaker Change: <unk> button in the NPL space it feels like demand fundamentals are much weaker economy does it feel like.

Speaker Change: Great. Thanks morning, everyone, maybe just a big picture question I mean.

Speaker Change: Demand in the PL in the <unk> space are going in opposite directions is that just a function of end market consumer versus industrial or is that a seasonality thing how would you think about that.

Speaker Change: And some of the PLO company, you kind of obviously.

Speaker Change: But <unk> was a pretty good peak season, and then maybe some momentum continuing into <unk>.

Speaker Change: <unk> button in the NPL space it feels like demand fundamentals are much weaker economy does it feel like.

Speaker Change: And also just a follow up on the price.

Speaker Change: Do you feel like there is still opportunity to push to kind of mid to high single digit pricing.

Speaker Change: Demand in the PL in the NPL space Theyre going in opposite directions is that just a function of end market consumer versus industrial or is that a seasonality thing how would you think about that.

If and when the cycle really picks up in the back off there. Thank you.

Speaker Change: Hey, Ravi this is Seth I appreciate the questions I'll start out with your first question then I'll pass it to Christopher on the pricing question, but as far as the freight environment goes we monitor the markets closely and we acknowledge the macro impact on length of the cycle something we haven't seen her history January hasn't really given us a clear view into the <unk>.

And also kind of.

Speaker Change: Just a follow up on the price kind of do you feel like there is still opportunity to push to kind of mid to high single digit pricing.

Speaker Change: If anyone does cycle really picks up in the back off there. Thank you.

Speaker Change: Hey, Ravi this is Seth I appreciate the questions I'll start out with your first question then I'll pass it to Christopher on the pricing question, but as far as the freight environment goes we monitor the markets closely and we acknowledge the macro impact and length of the cycle something we haven't seen in our history.

Speaker Change: Part of the year, just because of the weather impact that we mentioned.

Speaker Change: There's a lot of certainty out there. So that's made it tough to predict with greg's.

Speaker Change: Regulations, potentially being reduced and tariff so.

Speaker Change: Tax savings could impact free cash flow and it caused more investment.

Speaker Change: January hasn't really given us a clear view into the start of the year, just because of the weather impact that we mentioned.

Speaker Change: So we're watching a lot of different things, but regardless of the environment, we are well positioned to handle to handle any of those environments and we've seen many of these cycles over a 100 years, we navigated the last tariff situation.

Speaker Change: There's a lot of certainty out there. So that's made it tough to predict with <unk>.

Speaker Change: Regulations, potentially being reduced and tariffs so.

Speaker Change: Tax savings could impact free cash flow and it caused more investment so.

Speaker Change: Good as well so we view markets like this as an opportunity and we feel providing excellent service to our customers.

Speaker Change: So we're watching a lot of different things, but regardless of the environment, we are well positioned to handle to handle any of those environments and we've seen many of these cycles over our 100 years, we navigated the last tariff situation.

Speaker Change: What's going to continue to allow us to grow so we're focused on things in our control.

Speaker Change: To listen to our customers help them navigate this challenging time and we're also optimizing our cost to make sure that we continue to position ourselves for when the market turns pipeline metrics are strong we feel good about where demands that but we just got to say a few things kind of clear up as we move into the new year to give better guidance on that.

Speaker Change: Good as well so we view markets like this as an opportunity and we feel providing excellent service to our customers.

Speaker Change: What's going to continue to allow us to grow so we're focused on things in our control continue to listen to our customers help them navigate this challenging time and we're also optimizing our cost to make sure that we continue to position ourselves for when the market turns pipeline metrics are strong and we feel good about where demand is at but we just got to say a few things kind of clear up as we.

Christopher Atkins: Hey, Good morning, Ravi This is Christopher again, just from a from a pricing standpoint.

Speaker Change: Discipline that we've had for many decades at this point, where we are we have a cycle of renewals for contractual kind of deferred pricing that we're working with our customers most of them to have a 12 month cycle to make sure. We're securing increases there. So our plan is to secure good increases really regardless of the market because we do recognize that we we feel.

Speaker Change: Move into the new year to give better guidance on that.

Speaker Change: Hey, Good morning, Ravi. This is Christopher again, just from a from a pricing standpoint, that's a discipline that we've had for many decades at this point, where we are at we have a cycle of renewals for contractual kind of deferred pricing that we're working with our customers most of them to have a 12 month cycle to make sure we're securing increases there.

Speaker Change: Inflationary cost pressures that we have to offset and again just drawing back to the services really proud of the ABF team there that that our customer have valued and appreciated. The this the premium service that we're providing and understand when when we do need to secure increases there.

Speaker Change: So our plan is to secure good increases really regardless of the market because we do recognize that we face inflationary cost pressures that we have to offset and again just going back to the services really proud of the ABS team there that that our customer have valued and appreciated the just the premium service that we're providing and understand when when we do need to secure.

Speaker Change: Perfect. Thank you.

Speaker Change: Thanks Robyn.

Speaker Change: Our next question comes from the line of Tom <unk> with UBS. Please go ahead.

Yes, good good morning so.

Speaker Change: Judy I wanted to get your thoughts on how you think the competitive environment.

Speaker Change: Creases there.

Speaker Change: Perfect. Thank you.

Speaker Change: Thanks Robyn.

Speaker Change: Potentially would change in terms of what we heard.

Speaker Change: Our next question comes from the line of Tom <unk> with UBS. Please go ahead.

Speaker Change: Not that long ago about Fedex moving forward with the intention to spin out there youre going to add a lot of salespeople and focus on.

Tom <unk>: Hi, yes, good good morning so.

Speaker Change: Judy I wanted to get your thoughts on how you think the competitive environment.

Speaker Change: I think that focus on them will be more on SMB. So do you think that that's good or bad for the market I assume everybody has some overlap with Fedex freight just and I know.

Speaker Change: Potentially would change in terms of what we heard.

Speaker Change: Not that long ago about Fedex moving forward with the intention to spin out there youre going to add a lot of salespeople and focus on.

Speaker Change: Not sure how much you want to comment on our competitors, but that's kind of a big event in the space. Thank you.

Speaker Change: I think that focus on them will be more on SMB. So do you think that thats, good or bad for the market I assume everybody has some overlap with Fedex freight just and I know.

Speaker Change: Yes, it's there is I mean.

Speaker Change: Noteworthy.

Speaker Change: And what I'd say about.

Speaker Change: This is just like the other competitors I think that we have now across the board are strong competitor.

Speaker Change: Not sure how much you want to comment on competitors, but that's kind of a big event in the space. Thank you.

Speaker Change: And I.

Speaker Change: Yes, it's there is I mean, it's a big noteworthy event and what I'd say about <unk>.

Speaker Change: I feel good as Christopher has articulated a few times here about the pricing environment.

Speaker Change: And I feel good about the competitive environment.

Speaker Change: This is just.

Speaker Change: Just like the other competitors I think that we have now across the board are strong competitor and.

Speaker Change: One that we can succeed in because we are we've had a 55% growth in our pipeline this year.

Speaker Change: I feel good as Christopher has articulated a few times here about the pricing environment.

Speaker Change: We feel like it's within our control to.

Speaker Change: And I feel good about the competitive environment.

Speaker Change: To execute on that pipeline and we've got a lot of business. That's in late stages and I feel like the multi solution integrated approach that we go to market with.

Speaker Change: One that we can succeed in because we are we've had a 55% growth in our pipeline this year.

Speaker Change: Really is responsive in a time like this because there's so many unknowns and it seems like Theres a direct disruption every six months.

Speaker Change: We feel like it's within our control to execute on that pipeline and we've got a lot of business that's in late stages.

Speaker Change: And we've just gotten.

Speaker Change: And I feel like the multi solution integrated approach that we go to market with.

Speaker Change: Proactive about planning for the unexpected.

Speaker Change: Just really is responsive in a time like this because there are so many unknowns and it seems like there is a direct disruption every six months.

Speaker Change: And that's something that I think our team is excellent and I feel like the suite of solutions that we have to offer and the combinations of those is just very responsive and so I think many of our competitors are coming to market differently from one another but I like where we are.

And we've just gotten.

Speaker Change: Proactive about planning for the unexpected and that's something that I think our team is excellent and I feel like the suite of solutions that we have to offer and the combinations of those is just very responsive.

Yeah.

Speaker Change: What about that kind of part of that I guess your approach to the market and like.

Speaker Change: I don't know if you by segment by customer size or by certain vertical types, but.

Speaker Change: And so I think many of our competitors are coming to market differently from one another but I like where we are.

Speaker Change: Maybe your sales approach.

Speaker Change: And where you think you.

Speaker Change: What about the kind of part of that I guess your approach to the market and like.

Speaker Change: I don't know if things like more competition in the kind of SMB part with its a little more sales intensive or just maybe kind of if you see differences in competitive dynamic in different parts of the market or maybe where you resonate more with your approach.

Speaker Change: I don't know if you by segment by customer size or by certain vertical types, but.

Speaker Change: Where you may be your sales approach and where you think you.

Speaker Change: In certain parts of the market.

Speaker Change: I don't know if theres more competition in the kind of SMB part with its a little more sales intensive or just maybe kind of if you see differences in competitive dynamic in different parts of the market or maybe where you resonate more with your approach.

Speaker Change: Yes, what's interesting about your question is our recent.

Speaker Change: Organizational changes and.

Speaker Change: And I think that the chief commercial officer role.

Speaker Change: <unk> is going to be taking I guess tomorrow, starting tomorrow. So do you want to talk a little bit about that and your thoughts on that yes, Hey, Tom. This is Seth when I think about growth, we have a tremendous opportunity with the markets. We operate in have an over 400 billion worth of potential. So we have a lot of potential to expand.

In certain parts of the market.

Speaker Change: Yes.

Speaker Change: The interesting about your question is our recent.

Speaker Change: Organizational changes and <unk>.

Speaker Change: And I think that the chief commercial officer role that <unk> is going to be taking I guess tomorrow, starting tomorrow. So do you want to talk a little bit about that your thoughts on that yes, Hey, Tom. This is Seth when I think about growth, we have a tremendous opportunity with the markets we operate in.

Speaker Change: Within our current loyal customer base alone and we want to make sure we price that that aligns with the value that we provide so we see a lot of opportunity in front of us and we just need to do a better job on the execution front and that's why we announced these changes so by aligning sales marketing yield CX all under one leader we have the opportunity to.

Speaker Change: And over 400 billion worth of potential. So we have a lot of potential to expand within our current loyal customer base alone and we want to make sure we price that that aligns with the value that we provide so we see a lot of opportunity in front of us and we just need to do a better job on the execution front and that's why we announced these changes so by aligning sales mark.

Speaker Change: Capitalize on those on those opportunities that we see so we're going to continue to focus on optimizing our mix we've seen double digit growth in our managed solution. We expect all of these recent changes are going to accelerate not just one particular segment, but all segments across and that's really why we made this change and we're seeing some some good signs but it's.

Speaker Change: Getting yield CX, all under one leader.

Speaker Change: We have the opportunity to capitalize on those on those opportunities that we see so we're going to continue to focus on optimizing our mix.

Speaker Change: Just a little early with the weather and everything Thats going on in January but I think this unified approach is going to allow us to capture growth opportunities better than we do today.

Speaker Change: Seen double digit growth in our managed solution we have.

Speaker Change: Expect all of these recent changes are going to accelerate not just one particular segment, but all segments across and that's really why we made this change.

Speaker Change: In alignment with the sales and yield team I think is going to really strengthen our go to market approach.

And some some good signs, but it's just a little early with the weather and everything Thats going on in January but I think this unified approach is going to allow us to capture growth opportunities better than we do today and have an alignment with the sales and yield team I think is going to really strengthen our go to market approach.

Speaker Change: Okay, great. Thanks for the time.

Speaker Change: Thank you. Our next question comes from the line of Chris Wetherbee with Wells Fargo. Please go ahead.

Chris Wetherbee: Hey, Thanks, good morning, guys.

Chris Wetherbee: I am asking that weight per shipment and I understand some of the dynamics of the housing market and obviously moving in that context, I guess I'm curious if we see.

Speaker Change: Great. Thanks for the time.

Speaker Change: Thank you. Our next question comes from the line of Chris Wetherbee with Wells Fargo. Please go ahead.

Chris Wetherbee: Sort of an industrial pickup and maybe tonnage does get a bit better in many ways stay a little bit lower.

Chris Wetherbee: Hey, Thanks, good morning, guys.

Chris Wetherbee: I wanted to ask about weight per shipment and I understand some of the dynamics of the housing market and obviously moving in that context, I guess I'm curious if we see.

Chris Wetherbee: Does that impact kind of the incremental margins. You think you can put up in this business I guess, maybe a bigger picture question. Just zooming out is how do we think about that we'd per shipment what it means and maybe kind of how it might play out over the course of this year, assuming there is some degree of improvement in the demand side.

Chris Wetherbee: Sort of an industrial pickup and maybe tonnage does get a bit better and meeting week stay a little bit lower.

Chris Wetherbee: Sure So hey, Chris this gross.

Chris Wetherbee: Does that impact kind of the incremental margins. You think you can put up in this business I guess, maybe a bigger picture question. Just zooming out is how do we think about that lead per shipment what it means and maybe kind of how it might play out over the course of this year, assuming there is some degree of improvement in the demand side.

Chris Wetherbee: From a weight per shipment standpoint, it's like you said there is the industrial production and manufacturing demand has been sluggish and that's been that way for a while truckload demand has been soft and we are seeing and even participating in helping customers move LCL business from LPL to truckload to help our shippers really take advantage of that Mark.

Speaker Change: Sure. So hey, Chris This is Christopher.

Speaker Change: From a weight per shipment standpoint, it's like you said there is the industrial production and manufacturing demand has been sluggish and that's been that way for a while.

Chris Wetherbee: In its current state and then like you said the household.

Chris Wetherbee: <unk> that moving business that continues to be soft and that has persisted into January just with the interest rates being higher than they have been in the last couple of years. So those are some some pressures that we experienced from a wafer shipment standpoint, and any one of those things are all three of them.

Speaker Change: Truckload demand has been soft and we are seeing and even participating in helping customers move LCL business from LPL to truckload to help our shippers really take advantage of that market in its current state and then like you said the household goods moving business that continues to be soft and that has persisted into January.

Chris Wetherbee: That recovers I think that will be.

Speaker Change: A beneficial outcome for us as it relates to profit those are those are things that we wanted to happen, but we are well prepared to manage it really regardless of the profile that we're given we have a really strong operations yield sales functions to make sure that we're maximizing the return that we get and like Seth and Judy have already mentioned just a strong pipeline.

Speaker Change: Just with the interest rates being higher than they have been in the last couple of years. So those are some some pressures that we experienced from a wafer shipment standpoint, and any one of those things are all three are as that recovers I think that will be.

Speaker Change: Beneficial outcome for us as it relates to profit those are those are things that we want to happen, but we are well prepared to manage it really regardless of the profile that we're given we have a really strong operations yield sales functions to make sure that we're maximizing the return that we get and like Seth and Judy have already mentioned just the strong piped.

Speaker Change: Line that we have generated this year, we think regardless of what the market gives us we can continue to grow and outpace the market here.

Speaker Change: Hey, Chris This is Seth I'll add to that really when you think about all parts of our business both asset based and asset light we.

Speaker Change: We work to build a scalable operation, where we can take advantage of that operating leverage so the particulars on incremental margin would really depend on where the business is coming from and we evaluate each opportunity to ensure that it contributes to our financial targets. We've invested a lot in our network capacity productivity and we've been.

Speaker Change: Fine that we have generated this year, we think regardless of what the market gives us we can continue to grow and outpace the market here.

Speaker Change: Hey, Chris This is Seth I'll add to that really when you think about all parts of our business, both asset based and asset light.

Speaker Change: We work to build a scalable operation, where we can take advantage of that operating leverage.

Speaker Change: Disciplined with our pricing actions.

Speaker Change: So the particulars on incremental margin would really depend on where the business is coming from and we evaluate each opportunity to ensure that it contributes to our financial targets. We've invested a lot in our network capacity productivity and we've been very disciplined with our pricing actions.

Speaker Change: Looking at that on an account by account basis is beneficial and as the market turns its going to help build density in our network, which will help fill that empty capacity and get more freight per stop with resources. We already have deployed so as always we expect good incremental margin with the with the volume.

Speaker Change: Looking at that on an account by account basis is beneficial and as the market turns its going to help build density in our network, which will help fill that empty capacity and get more freight per stop with resources. We already have deployed so as always we expect good incremental margin with the with the volume.

Speaker Change: We bring on.

Speaker Change: Because we price on value that we bring so I feel really good about that as the market starts to recover.

Speaker Change: Okay I appreciate it thanks very much.

Bruce Chan: Our next question comes from the line of Bruce Chan with Stifel. Please go ahead.

Speaker Change: And that we bring on.

Speaker Change: Because we price on value that we bring so I feel really good about that as the market starts to recover.

Bruce Chan: Thanks, operator, and good morning, everybody.

Speaker Change: <unk> here on the tech enhancements, specifically on the city route optimization and ABF I don't know if thats <unk> or another provider if its internal but you know Mike.

Speaker Change: Okay I appreciate it thanks very much.

Bruce Chan: Our next question comes from the line of Bruce Chan with Stifel. Please go ahead.

Speaker Change: Rudimentary math tells me that that's maybe worth 50 bps of gross savings on the or.

Bruce Chan: Yes, thanks, operator, and good morning, everybody.

Speaker Change: Is that fair and can you maybe give us a rough sense of how much opportunity is left from additional phases of the rollout.

Speaker Change: <unk> here on the tech enhancements, specifically on the city route optimization and ABF I don't know if thats through maven or another provider if its internal but.

Speaker Change: Again, maybe on on the <unk> side.

Speaker Change: Rudimentary math tells me that that's maybe worth 50 bps of gross savings on the or.

Speaker Change: Good morning, Bruce This is Matt Godfrey, yes, so when we look at the city route optimization, we rolled out the initial phase phase one of it throughout 'twenty four and we saw a return of about $1 million a month from that initial phase.

Speaker Change: Is that fair and can you maybe give us a rough sense of how much opportunity is left from additional phases of the rollout.

Speaker Change: Again, maybe on the <unk> side.

Speaker Change: When you look at the additional phases of city route optimization.

Speaker Change: Good morning, Bruce This is Matt Godfrey, yes, so when we look at the city route optimization, we rolled out the initial phase phase one of it throughout 'twenty four and we saw a return of about a $1 million a month from that initial phase.

Speaker Change: The second phase focused on enhancing kind of the optimization tools in the initial phase and then the third phase focused on enhancing our daily pickup operation.

Speaker Change: We don't see as much runway as the initial phase from a return standpoint, but we feel positive about the results that we will get and we also see a significant benefit.

Speaker Change: We look at the additional phases of city route optimization.

Speaker Change: The second phase focused on enhancing kind of the optimization tools in the initial phase and then the third phase focused on enhancing our daily pickup operation.

Speaker Change: Our customers around the third phase, especially as it relates to pickups and the importance of the ranking on the on the Master service, there and so but when we think about the returns that we get from any of our efficiency projects. It's really a testament to the high levels of execution of our people in the field and it's listening to our.

Speaker Change: We don't see as much runway as the initial phase from a return standpoint, but we feel positive about the results that we'll get and we also see a significant benefit to.

Speaker Change: To our customers around a third phase, especially as it relates to pickups and the importance of the ranking on the on the mass tier service there and so when we think about the returns that we get from any of our efficiency projects. It's really a testament to the high levels of execution of our people in the field and it's listening to our.

Speaker Change: People that led to our investments in optimization and led to the investments and the training that we've referenced before and it led to the investments in this enhanced toolset. So as we turn the page into 'twenty five yes, we're excited about the additional phases of city route optimization, but we have a robust.

Speaker Change: People that led to our investments in optimization and led to the investments and the training that we've referenced before and it led to the investments in this enhanced toolset. So as we turn the page into 25, yes. We're excited about the additional phases of city route optimization, but we have a robust.

Speaker Change: <unk> profile project profile.

Speaker Change: What's really exciting is these projects are starting to build on one another so we're starting to stack. These things on top of each other both from an efficiency standpoint, and from a customer experience standpoint, and as mentioned, we're going to continue to invest in our training team of operational experts expanding that and.

Speaker Change: <unk> profile project profile.

Speaker Change: And what's really exciting is these projects are starting to build on one another so we're starting to stack. These things on top of each other both from an efficiency standpoint, and from a customer experience standpoint, and as mentioned, we're going to continue to invest in our training team of operational experts expanding that and.

Speaker Change: We know that this improvements in efficiency and reliability.

Speaker Change: They position us for growth and they support our strong pricing.

Speaker Change: Okay. That's super helpful. On that and then just a quick follow up on the share shifts comments to TL in the prepared remarks.

Speaker Change: I think some of your competitors have discussed in the past that the overlap is actually pretty minimal maybe low single digit percentage I'd imagine maybe that's a little higher for you given your length of haul and maybe your wafer shipment is that fair to say and do you have an estimate of what that overlap looks like.

Speaker Change: We know that this improvements in efficiency and reliability.

Speaker Change: They position us for growth and they support our strong pricing.

Speaker Change: Okay. That's super helpful. Matt and then just a quick follow up on the share shifts comments to <unk> in the prepared remarks.

Speaker Change: I think some of your competitors have discussed in the past that the overlap is actually pretty minimal maybe low single digit percentage I'd imagine maybe that's a little higher for new given your length of haul and maybe your weight per shipment is that fair to say and do you have an estimate of what that overlap looks like.

Speaker Change: Yes.

Speaker Change: This is Seth the truckload market still has too much capacity and we've seen where the rates are at in the truckload space and that's caused some of the shipments on the fringe that 7500 pound a 20000 pound freight that might traditionally working on LCL network shift to shift into the truckload space. So I do think.

Speaker Change: Yes.

Speaker Change: This is Seth the truckload market still has too much capacity and we've seen where the rates are at in the truckload space and that's caused some of the shipments on the fringe that 7500 pound a 20000 pound freight that might traditionally working on LCL network shift to shift into the truckload space. So I do think as the market Rick.

Speaker Change: As the market recovers in the truckload space some of that freight fits better in an LTE network and I think we will see that shift back.

Speaker Change: This is more pronounced than previous shifts just because the market weakness on the truckload side truckload carriers really don't like to do multiple stop.

Speaker Change: Run so I think ultimately that freight is going to shift back as far as an actual impact it's hard to quantify that so but it's not the bulk of our business. So when it does come back we'll be selective on what we bring back into network based off of demand from our core customers.

Speaker Change: Cover some of the truckload space some of that freight fits better in an LTE network and I think we will see that shift back.

This is more pronounced than previous shifts just because the market weakness on the truckload side truckload carriers really don't like to do multiple stop.

Got it thank you.

Speaker Change: <unk>. So I think ultimately that freight is going to shift back as far as an actual impact it's hard to quantify that so but it's not the bulk of our business. So when it does come back we'll be selective on what we bring back into network based off of demand from our core customers.

Speaker Change: Our next question comes from the line of Stephanie more with Jefferies. Please go ahead.

Speaker Change: Great Good morning, and congrats on the good results and Joe <unk> on for Stephanie more maybe keeping on the macro in weight per shipment question. How should we think about the ABS advantage set another way if housing and construction comes back how would you frame ABS ability to not just participate b a particular beneficiary.

Speaker Change: Got it thank you.

Operator: Our next question comes from the line of Stephanie more with Jefferies. Please go ahead.

Speaker Change: Great Good morning, and congrats on the good results to Joe <unk> on for Stephanie more maybe keeping on the macro in weight per shipment question. How should we think about the ABS advantage set another way if housing and construction comes back how would you frame ABS ability to not just participate b a particular beneficiary.

Speaker Change: The competition is sitting on their hands. So what would give you guys the confidence to be able to see outsized growth in that positive environment and also could you speak to that 55% pipeline.

Speaker Change: Pipeline growth, what's driving that thanks, so much.

Speaker Change: Yes.

Speaker Change: Seth I think it benefits us quite a bit when you think about what we've built over the last two years to.

Speaker Change: The competition isn't sitting on their hands. So what would give you guys the confidence to be able to see outsized growth in that positive environment and also could you speak to that 55%.

Speaker Change: Two three years over the long term we've been focused.

Speaker Change: Particularly at ABF on the service front you saw that in the Masstige results. So.

Speaker Change: <unk> line growth, what's driving that thanks, so much.

Speaker Change: Yes.

Speaker Change: We've seen our own internal stats continue to improve as we moved into the new year. So I think customers are going to value that service as things start to improve the efficiency gains allows us to move more freight through the network at a better cost better velocity. So we feel like all the efficiency gains that we've achieved over the last few years and then I think all the changes we announced.

Speaker Change: Seth I think it benefits us quite a bit when you think about what we've built over the last two years.

Speaker Change: Two three years over the long term we've been focused.

Speaker Change: Particularly at ABF on the service front you saw that on the mass deal results. So we've seen our own internal stats continue to improve as we moved into the new year. So I think customers are going to value that service as things start to improve the efficiency gains allows us to move more freight through the network at a better cost better velocity.

Speaker Change: The organizational structure change I think is going to allow us to get deals through faster as customers are going to be looking for capacity as the market starts to shift. So we continue to focus on our facilities plan and we've been on that road map for a long time, we are continuously optimizing our network. So I think as things shift we are positioning ourselves.

Speaker Change: So we feel like all the efficiency gains that we've achieved over the last few years and then I think all the changes we announced with the organizational structure change I think is going to allow us to get deals through faster as customers are going to be looking for capacity as the market starts to shift. So we continue to focus on our facilities plan and we've been on that road map for a long time.

To be there for our customers to make sure that we can respond and make sure that they don't Miss a beat so they can see growth in their business. So we're listening to our customers and making sure we're aligned with them and I think we're going to be positioned for outsized growth when the market does turn.

Speaker Change: We are continuously optimizing our network. So I think as things shift we are positioning ourselves to be there for our customers to make sure that we can respond and make sure that they don't Miss a beat so they can see growth in their business. So we're listening to our customers and making sure we're aligned with them and I think we're going to be positioned for outsized growth when the market does turn.

Speaker Change: Okay, and then on that 55% pipeline growth, what's driving that.

Speaker Change: Yes, the 55% pipeline growth a lot of that has to do with our sales team just executing on what we set out.

Speaker Change: But keep in mind not every opportunity that comes through the pipeline makes sense for the business. We got to make sure that we're pricing for the value. We deliver so what that really is telling me. It's a lead indicator to what's to come because that means customers are coming to us asking for solutions. So we view it as a lead indicator for future potential.

Speaker Change: Sure.

Great and then on that 55% pipeline growth, what's driving that.

Speaker Change: Yes, the 55% pipeline growth a lot of that has to do with our sales team just executing on what we set out.

Speaker Change: Keep in mind not every opportunity that comes through the pipeline makes sense for the business, we got to make sure that we're pricing for the value. We deliver so what that really is telling me. It's a lead indicator towards to come because that means customers are coming to us asking for solutions. So we view it as a lead indicator for future potential.

Speaker Change: So I view it as a very positive thing that means customers are looking for partners and supply chain because they see the disruption going on in the market and they know what we bring to the table and our stability our solutions. So I view it as a very positive.

Speaker Change: Great. Thank you so much.

Speaker Change: I view it as a very positive thing that means customers are looking for partners and supply chain because they see the disruption going on in the market and they know what we bring to the table and our stability our solutions. So I view it as a very positive.

Speaker Change: Our next question comes from the line of Ken <unk> with Bank of America. Please go ahead.

Ken: Hey, good morning, Judy and team.

Speaker Change: You mentioned a couple of things you mentioned Capex youre, adding a 113 doors.

I guess real estate capex of $60 million to $80 million or are you looking at any remaining auctions from from yellow and is there any regions you are filling in or does it just remain kind of continued expansion of existing door capacity and then just a second follow up from some of the previous questions. You mentioned the volume is down 11% in January can you parse what was.

Speaker Change: Great. Thank you so much.

Speaker Change: Our next question comes from the line of Ken <unk> with Bank of America. Please go ahead.

Ken: Hey, good morning, Judy and team.

Ken: You mentioned a couple of things you mentioned Capex youre, adding 113 doors.

Speaker Change: I guess real estate capex of $60 million to $80 million or are you looking at any remaining auctions from from yellow and is there any regions youre filling in or does it just remain kind of continued expansion of existing door capacity and then just a second I guess follow up from some of the previous questions. You mentioned the volume is down 11% in January can you parse what was weather.

Speaker Change: Whether I guess, it sounds like Youre spending a little bit more negative.

Speaker Change: Feedback on the state of the market than even kind of the commentary on still too much capacity in the truckload, whereas some of them are mentioning that the capacity is starting to pan out. So just trying to understand kind of the backdrop that we're seeing right now.

Speaker Change: I guess, it sounds like youre, sending a little bit more negative feedback on the state of the market than even kind of the commentary on still too much capacity in the truckload, whereas some of them are mentioning that the capacity is starting to have sent out. So just trying to understand kind of the backdrop that we're seeing right now thanks.

Matt: Hey, Ken This is sorry, Ken Hey, it's Matt so on the capital side.

Matt: The $60 million to $80 million of real estate capital Theres, a little bit of a mix in there we do have some expansion.

Matt: Our new facility that we're building a new larger service Center and then we've got just some general maintenance on our real estate portfolio that is in that as well I think it's fair to say, we're continuing to follow the yellow process to the extent that there are opportunities that makes sense in that process for our business for the right price, we'll look to.

Speaker Change: Hey, Ken this is Scott.

Matt Godfrey: Alright, Ken Hey, it's Matt so on the capital side.

Speaker Change: The $60 million to $80 million of real estate capital Theres, a little bit of a mix in there we do have some expansion.

Speaker Change: Our new facility that we're building a new larger service Center and then we've got just some general maintenance on our real estate portfolio that is in that as well I think it's fair to say, we're continuing to follow the yellow process to the extent that there are opportunities that makes sense in that process for our business for the right price, we'll look to.

Matt: <unk>.

To participate there and then.

Matt: Then for the January I don't think that there was anything negative that we were looking to highlight there other than yes, we did have.

Matt: Worse weather if you look on historical basis. It was it was the highest number of service center closures since 2014 as I mentioned in my prepared remarks, and so that did impact the results, but the days that weren't weather impacted were stronger days and so definitely no read through that we are.

Speaker Change: To participate there.

Speaker Change: And then for the January I don't think that there was anything negative that we were looking to highlight there other than yes, we did have.

Speaker Change: Worse weather, if you look on historical basis.

Matt: Trying to give on the macro environment or what we're seeing for the year based on what we saw in January.

Speaker Change: It was the highest number of service center closures since 2014 as I mentioned in my prepared remarks, and so that did impact the results, but the days that weren't weather impacted were stronger days and so definitely no read through that we're trying to give on the macro environment or what we're seeing for the year based on what.

Matt: Great. Thank.

Matt: Thank you.

Matt: Yes.

Our next question comes from the line of Ari Rosa with Citi. Please go ahead.

Ari Rosa: Hi, Good morning, I just wanted to ask a question about the asset light segment.

Speaker Change: We saw in January.

Ari Rosa: Maybe you could give some color we have seen here a couple of quarters in a row, where margins have been negative in that segment, maybe you could give some color on why that is whats. The challenge that's kind of holding that segment back from getting our profitability I mean, obviously I understand the macro headwinds and the difficult macro environment, but like do we need to see a more supportive Mac.

Speaker Change: Great.

Speaker Change: Thank you.

Speaker Change: Yes.

Speaker Change: Our next question comes from the line of Ari Rosa with Citi. Please go ahead.

Hi, Good morning, I just wanted to ask a question about the asset light segment.

Speaker Change: Maybe you could give some color we have seen here a couple of quarters in a row, where margins have been negative in that segment. Maybe you could give some color on why that is whats. The challenge that is kind of holding that segment back from getting our profitability I mean, obviously I understand the macro headwinds and the difficult macro environment, but like do we need to see a more supportive Matt.

Ari Rosa: ROE for that business to be profitable and is there.

Ari Rosa: Effectively should we think of that business.

Ari Rosa: Capable of achieving profitability.

Ari Rosa: In a challenging macro environment.

Ari Rosa: Or are there things that you can do in terms of kind of structural improvements to that business or efficiency savings.

Speaker Change: ROE for that business to be profitable and is there.

Ari Rosa: It can drive profitability, because we see obviously some of the efficiency metrics that you pointed to this quarter look encouraging, but obviously the negative margins continue to be a challenge. So just help us kind of unpack that thank you.

Speaker Change: Effectively should we think of that business is capable of achieving profitability.

Speaker Change: In a challenging macro environment.

Speaker Change: Or are there things that you can do in terms of kind of structural improvements to that business or efficiency savings.

Ari Rosa: Yes. Thanks, Larry This is Seth and I do feel confident we can get asset light to a better place achieve profitability regardless of what the market does so we're focused on improving those results.

Speaker Change: It can drive profitability, because we see obviously some of the efficiency metrics that you pointed to this quarter look encouraging, but obviously the negative margins continue to be a challenge. So just help us kind of unpack that thank you.

Ari Rosa: It's been a focus of mine as I moved into this new role. So really there is a lot of different things. We can do the first is that we improve the profitability of our account base and we've been challenged with the macro environment. As you mentioned, but we can do a better job with our profitability. So we've been working on identifying accounts and taken some of those cost actions.

Speaker Change: Yes. Thanks, Larry This is Seth and I do feel confident we can get asset light to a better place achieve profitability regardless of what the market does so we're focused on improving those results and it's been a focus of mine as I moved into this new role. So really there is a lot of different things. We can do the first is that we improve the profitability of our account.

Ari Rosa: And I think youll start to see that come through as we move through the bid season.

Ari Rosa: Second the mix of our truckload business that is more heavily weighted towards enterprise business and that's generally more aggressively priced so we invested in a team focused on growing the small and medium in middle market.

Speaker Change: Base and we've been challenged with the macro environment as you mentioned, but we can do a better job with our profitability. So we've been working on identifying accounts and taken some of those cost actions and.

Ari Rosa: And I think that's going to help us with our mixed management because generally the SMB is more profitable for us. The third is really focusing on cost control. We took some cost actions throughout the quarter and we expect to see progress on those cost actions as we move through the new year.

Speaker Change: And I think youll start to see that come through as we move through the bid season.

Speaker Change: Second the mix of our truckload business. It is more heavily weighted towards enterprise business and that's generally more aggressively priced so we invested in a team focused on growing the small and medium in middle market and I think that's going to help us with our mixed management because generally the SMB is more profitable for us.

Ari Rosa: Are going to continue to focus on making sure our cost is in line with our shipment progression. The fourth really is around growing managed solutions manage those continued to be profitable.

Speaker Change: Third is really focusing on cost control, we took some cost actions throughout the quarter and we expect to see progress on those cost actions as we move through the new year.

Ari Rosa: For us even through the cycle, it's continued to grow by double digits. The service resonates with our customers. So we feel good and we have shifted resources with this organizational structure change to continue to accelerate that and then you mentioned in the productivity improvements and asset light that's been a really good story, but I do feel like we're just getting started we got a lot.

Speaker Change: We're going to continue to focus on making sure our cost is in line with our shipment progression. The fourth really is around growing managed solutions manage this continued to be profitable.

Speaker Change: For us even through the cycle, it's continued to grow by double digits. The service resonates with our customers. So we feel good and we've shifted resources with this organizational structure change to continue to accelerate that and then you mentioned the productivity improvements and asset light and that's been a really good story, but I do feel like we're just getting started we got a lot.

Ari Rosa: More to do there.

Ari Rosa: I'm excited about the tech roadmap that we have in front of us and the last is really around our people I feel really good about our people through those listening sessions. They want to do what's right for our customers and I feel like that's a winning combination as we as we look forward to a better 2025 and our satellite.

Speaker Change: More to do there and I'm excited about the tech roadmap that we have in front of us and the last is really around our people I feel really good about our people through those listening sessions. They want to do what's right for our customers and I feel like that's a winning combination as we as we look forward to a better 2025 and our satellite.

Speaker Change: Our next question will come from the line of Jeff Kauffman with vertical research partners. Please go ahead.

Jeff Kauffman: Thank you very much and congratulations.

Jeff Kauffman: So I wanted to ask another question on asset light if I can because I feel like the <unk> business has spent a lot of questions asked so.

Speaker Change: Our next question will come from the line of Jeff Kauffman with vertical research partners. Please go ahead.

Jeff Kauffman: Just listening to your commentary to that last question.

Jeff Kauffman: Thank you very much and congratulations.

Jeff Kauffman: So should we think of one $5 billion in revenue as a breakeven.

Speaker Change: So I wanted to ask another question on asset light if I can because I feel like the <unk> business has spent a lot of questions asked so.

Jeff Kauffman: In the asset light business, and you need to generate growth and you need to do things to make money on asset light or.

Just listening to your commentary to that last question.

Jeff Kauffman: Maybe a different way to think about it is what type of margin do you think this business should be generating.

Speaker Change: So should we think of one 5 billion in revenue as a breakeven.

Jeff Kauffman: If revenues didn't grow because I know for a long time, the thinking was let's do acquisitions, let's go asset light asset light may one day be more than 50% of revenue.

Speaker Change: In the asset light business, and you need to generate growth and you need to do things to make money on asset light or.

Speaker Change: Maybe a different way to think about it is what type of margin do you think this business should be generating.

Jeff Kauffman: It feels like that momentum stalled a little bit so maybe think about kind of bigger picture strategy on what asset light should be doing.

Speaker Change: If revenues didn't grow because I know for a long time, the thinking was let's do acquisitions, let's go asset light asset light may one day be more than 50% of revenue.

Jeff Kauffman: In terms of contribution to the bottom line.

Speaker Change: Yeah. Thanks, Jeff for the question. So certainly we're focused on providing a premium experience for our customers and we think a key part of that is having a broad suite of solutions that address their logistics challenges.

Speaker Change: It feels like that momentum has stalled a little bit. So maybe think about kind of bigger picture strategy on what asset light should be doing.

Speaker Change: In terms of contribution to the bottom line.

Speaker Change: And so if you look at the progress that we're making there certainly we've highlighted on the managed side just how we're able to grow our overall business with that solution. It feeds and really across the board, including into the asset life solutions and over to the ABF solution.

Yes, Thanks, Jeff for the question. So certainly we're focused on providing a premium experience for our customers and we think a key part of that is having a broad suite of solutions that address their logistics challenges.

Speaker Change: And so if you look at the progress that we're making there certainly we've highlighted on the managed side just how we're able to grow our overall business with that solution. It feeds in really across the board, including into the asset light solutions and over to the ABF solution. We continue to see the pipeline grew.

Speaker Change: We continue to see the pipeline growth in large part driven by some of the asset life solutions, including managed growing in terms of a breakeven I don't think that I would characterize it in terms of any specific revenue numbers certainly margin.

Speaker Change: He is an important piece there we continue to particularly as we're going through this upcoming bid season on the truckload side, just make sure we're well calibrated on a margin side to be taking on the business that makes sense for us and certainly we've been looking at productivity technology efficiency initiatives to just make sure that the cost structure on that.

Speaker Change: In large part driven by some of the asset light solutions, including managed growing in terms of a breakeven I don't think that I would characterize it in terms of any specific revenue numbers certainly margin.

Speaker Change: He is an important piece there we continue to has been particularly as we're going through this upcoming bid season on the truckload side, just make sure we're well calibrated on a margin side to be taking on the business that makes sense for us and certainly we've been looking at productivity technology efficiency initiatives to just make sure that the cost structure on that.

Speaker Change: Businesses scale to what we're seeing from the revenue side. So we still think that that business is an important piece of the overall solution that we're providing for our customers and certainly we're very focused this year on returning that business to profitability.

Speaker Change: Alright, thank you.

Speaker Change: Businesses scale to what we're seeing from the revenue side. So we still think that that business is an important piece of the overall solution that we're providing for our customers and certainly we're very focused this year on returning that business to profitability.

Speaker Change: Okay.

Speaker Change: Our next question comes from the line of Scott Group with Wolfe Research. Please go ahead.

Speaker Change: Hey, Thanks, good morning.

Speaker Change: So just because theres been so much monthly volatility in the tonnage and yield trends I know last quarter, you sort of gave some directional revenue guidance. I think you said it was going to be down mid single digits year over year any directional thoughts on how to think about.

Speaker Change: Alright, thank you.

Speaker Change: Thanks.

Speaker Change: Our next question comes from the line of Scott Group with Wolfe Research. Please go ahead.

Scott Group: Hey, Thanks, good morning.

Scott Group: So just because theres been so much monthly volatility in that tonnage and yield trends I know last quarter, you sort of gave some directional revenue guidance. I think you said it was going to be down mid single digits year over year any directional thoughts on how to think about.

Speaker Change: The <unk> revenue in Q1.

Speaker Change: Yes.

Speaker Change: Thanks, Scott I mean, certainly.

Speaker Change: The first quarter tends to be a softer quarter for us on the asset based side.

Speaker Change: I think if you looked at our 10 year history on a sequential basis were down revenue per day is down about 4%.

Scott Group: The <unk> revenue in Q1.

Scott Group: Yes.

Speaker Change: When you move sequentially from the fourth quarter to the first quarter I do think just with all the initiatives that we've talked about.

Scott Group: Scott I mean, certainly.

Scott Group: The first quarter tends to be a softer quarter for us on the asset based side.

Speaker Change: Yes, we see significant weather impacts as we move into February or March I do think we have some potential to outperform that historical trend.

Scott Group: I think if you looked at our 10 year history on a sequential basis were down revenue per day is down about 4%.

When you move sequentially from the fourth quarter to the first quarter I do think just with all the initiatives that we've talked about unless we see significant weather impacts as we move into February or March I do think we have some potential to outperform that historical trend.

Speaker Change: Okay, and then you take a step back.

Speaker Change: Last year, I think you had a bigger tonnage decline than anybody you had.

Speaker Change: Bigger increase in yield than anybody so just more volatile.

Speaker Change: The net of it was margin down a little bit I mean, I guess, what are we trying to manage too in 'twenty five.

Okay and then.

Scott Group: Take a step back.

Scott Group: Last year, I think you had a bigger tonnage decline in antibody you had.

Speaker Change: Just waiting for the macro to get better are we trying to manage to better yield better tonnage and realistically. When do you think we can start seeing margin improvement again.

Scott Group: A bigger increase in yield than anybody so just more volatile.

Scott Group: The net of it was margins down a little bit I mean, I guess, what are we trying to manage to win 25 outside of just waiting for the macro to get better are we trying to manage to better yield better tonnage and realistically. When do you think we can start seeing margin improve.

Speaker Change: Yes.

Speaker Change: So Scott this is Matt So I would just say certainly really across the board as we looked at 25 with the macro backdrop that we're seeing for the year I mean, we do expect to see a pickup in the industrial economy. We do expect to see just continued progress from all of the customer facing and revenue initiatives that we're working on so.

Scott Group: Again.

Scott Group: Yes.

Scott Group: So Scott this is Matt So I would just say certainly really across the board as we look to 'twenty five with the macro backdrop that we're seeing for the year I mean, we do expect to see a pickup in the industrial economy. We do expect to see just continued progress from all of the customer facing and revenue initiatives that we're working on so.

Speaker Change: Certainly from a shipment count perspective, we see the opportunity for growth there and then the macro backdrop, helping on the tonnage side and then we continued to make significant progress on the pricing side as well and so I think those three items coming together the shipment side the tonnage side is just.

Scott Group: From a shipment count perspective, we see the opportunity for growth there and then the macro backdrop, helping on the tonnage side and then we continued to make significant progress on the pricing side as well and so I think those three items coming together the shipment side.

Speaker Change: We see an improving macro backdrop in pricing I think all of that sets up well for 2025.

Okay alright, thank you.

Speaker Change: And that concludes our question and answer session and I will now turn the call back over to you Amy Mendenhall for closing remarks.

Scott Group: Tonnage side is just as we see an improving macro backdrop in pricing I think all of that sets up well for 2025.

Speaker Change: Thanks to everyone for joining us today, we certainly appreciate your interest in our best have a great day.

Scott Group: Okay alright, thank you.

Speaker Change: Everyone that will conclude our call today. Thank you all for joining you may now disconnect.

Speaker Change: And that concludes our question and answer session and I will now turn the call back over to you Andy Mendenhall for closing remarks.

Andy Mendenhall: Thanks to everyone for joining us today, we certainly appreciate your interest in our best have a great day.

Andy Mendenhall: Everyone that will conclude our call today. Thank you all for joining you may now disconnect.

Andy Mendenhall: [music].

Andy Mendenhall: Yes.

Andy Mendenhall: [music].