Nick Hobbs: Hey, Al. First of all, I would say, on our ability to replace some — clearly, the way our business works is, we usually have waves when we get start-up so we incur the cost. And so, with us losing some of our trucks in 2023, we don’t have the momentum we normally have going into 2024, and so we replaced them quickly, but it just takes a little time to kind of get the momentum and get the revenue and the profitability up and going. So, that’s the reason that we’re talking about 2024 the way we are. Now, as far as any vertical, we looked through our book. I would say, on the furniture side, we had a little bit of that in dedicated. It’s impacted some. But I would say that one that’s probably been the strongest has been the grocery side of things have just been consistent throughout. And then the others, it’s kind of — just as the economy is going, they’re kind of going. Nothing really sticks out anywhere else.
Brad Delco: And Allison, this is Brad Delco. I’m sorry. I just want to add — touch to that on your question about kind of the churn that Nick shared before. We share each quarter the success the team had selling new fleets. And so Nick kind of shared a churn number of 9% on our — on the base of the fleet in 2023. The team was very successful in backfilling some of those losses by selling, that could be into new deals and so. I think that what the best messaging is effectively, hey, we have some foresight into some, downsizing of some fleets in 2024. And I think in his prepared remarks, he said, hey, the strategic focus is going to be out there selling to backfill some of those losses.
Operator: Your next question comes from the line of Ravi Shanker from Morgan Stanley. Please go ahead. Your line is open.
Ravi Shanker: Thanks. Good afternoon, everyone. Just regarding this insurance situation going, obviously, it seems a little bit frustrating given how much it’s outside of your control. Is legislation in Congress the only answer to this? Do you think some of the technology you’re putting in place is going to have a tangible impact on reducing some of these claims? And is there anything you guys can do as a large carrier to maybe avoid some of the disproportionate impact on large carrier versus small ones?
Nick Hobbs: Yeah, I’ll jump in and this is Nick. Clearly, we think we had record safety year when we look at DOT preventables for the entire organization and we’re very pleased with that. We’re doing things like — and we’re placing cameras. We’re about 65% complete on that rollout. We will have all of those other trucks [retro’ed] (ph) by the end of Q3. So, we clearly think that will help us with our accidents. And then if you think we’re also — we got 65% of our fleet that’s got Side Guard Assist that helps us on the right side. Those we can’t retro, this is going to take us another couple of years. So we think we’re out leading well on the safety side, but the fact is that the individual claims are just going through the roof and the cost of those.
And quite honestly, those are in state courts. And so it’s a state-by-state that’s got to be addressed. We’re working with the American Trucking Association and trying to go state-by-state to get tort reform. So, it’s going to be a long battle there unless there is some federal legislation that would kind of help us interstate truckers out there. So, John, I don’t know if you want to —
John Kuhlow: Hi, Ravi. I’d just add, it is frustrating, but we are focused on the areas that we can control. And as Nick said, we’re working to do everything we can to improve our safety to make sure that the incidents themselves are down. And then there needs to be something done with respect to the settlement charges.
Operator: Your next question comes from the line of Jordan Alliger from Goldman Sachs. Please go ahead. Your line is open.
Jordan Alliger: Yeah, hi. Maybe sort of switch it up a little bit on the brokerage side of the equation, obviously still a lot of pressure there profit wise. I mean what do you think needs to happen to get back in black? Is it purely a cycle thing, price and volume or is there is some things you need to do structurally to whether it’d be cost or technology? I know you made a lot of investments in the past, but maybe talk a little bit truck brokerage and your thinking on return to profitability.
Brad Hicks: Yeah, Jordan, thank you. It’s Brad Hicks. It’s incredibly difficult brokerage environment as we will note throughout the entire year. We did spend a tremendous amount of time focused on our cost as we saw volume decline and revenue quality back up significantly. Maybe it’s extremely difficult through the bid season that really pick your spots in an ever so declining rate environment. And I do feel like last quarter or quarter and a half, we’ve been just kind of tried to long that model. As Darren mentioned in his opening question around, we’re taking this wait-and-see approach through bid season, but we do feel like things did inflect. The one thing I would mention that if you really look at the growth that we experienced through the pandemic, we’re there for our customers in their greatest time of need and really felt like we were strategic.
And really what we saw from a behavior standpoint from several of our customers throughout 2023 is that they really acted more transactional on the back-end of that pandemic. Multiple round bids, driving down to that lowest price. And so, we do have to recalibrate how we think about how we step forward. What I can tell you is we’re focused on growing, but we’re focused on growing at the right rate where we can add value to our customers’ networks.
Operator: Your next question comes from the line of Jason Seidl from TD Cowen. Please go ahead. Your line is open.
Jason Seidel: Thank you, operator, and thank you all for taking the question. Can we focus a little bit on reported yields in terms of the outlook? It seems like there’s going to be more mix changes coming with the move back to the West Coast ports. How should we look at that as it flows through the model for 2024?
John Roberts: Well, certainly — I mean, the pricing environment just has too many unknowns today really to highlight anything there, Jason. What I would say is, it’s certainly the longer length of haul loads that the West Coast represents can represent higher revenue per load. But that doesn’t necessarily mean that there is pricing increases there. And so I’m not going to be able to fill out sort of the mix for you. I mean, we don’t even know what that mix will be just yet. Certainly, there is an opportunity for growth on the West Coast that we’re hearing about as more and more customers are talking about a shift of their imports to the West Coast.
