Knight-Swift Transportation Holdings Inc. (NYSE:KNX) Q1 2024 Earnings Call Transcript

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Adam Miller: Well, look, I think our overarching strategy is still intact, right? I’ve been — I’ve worked very closely with Kevin Knight over the last 20 years, with [indiscernible] over the last 20 years. And we kind of view things very similarly. When I think about our strategy on the truckload side, it’s — we got to be an industry leader in the market regardless of the market conditions. So in a good time, we have to have the best operating ratio, be the most efficient. And in more challenging times, we again have to have the best operating and be the most efficient. And I think there can be times when the market is really good that you can sometimes take your eye off the ball in a couple of areas on the cost side of the business and it’s easy to do that.

And so we have to remain disciplined through good times and bad times to ensure that we always keep that cost advantage over the — over our peers in the industry. We’re going to continue to build out the LTL network. I think everyone here is very aligned with that and sees the value in that and we’re going to do that organically where we can and where we think it speeds up the process and we can get good returns, we will look at M&A as an opportunity. I think from a Logistics standpoint, we found that we really have invested in power only but we found that we can do that business. We can operate it with fewer trailers than we have today. And I think that’s one of the major adjustments that we’re making currently is rightsizing that trailer to tractor ratio without impairing our ability to do power only and we think there’s quite a bit of opportunity to do that.

And we want our Logistics business to complement what we do on the asset side. And in many cases, it’s there to support from a service perspective. But in some cases, it’s giving freight back to truckload. Now certainly, we have direct relationships with logistics with our customers and we like doing that as well. But our Logistics business can really ride the wave of being part of one of the best operated truckload businesses in the industry and we need to make sure that we create that alignment. And then I already talked a lot about Intermodal and what we need to do to build the profitability back up there and that’s underway. And it will take some time but we feel confident with the agreements we have with our rail partners and the leadership we have there and the progress we’re making in some of the early bids this year that we’ll have a pathway to see that profitable.

But really, again, we want to keep the nimbleness in the market to be able to react to changes. We’ve got to have a cost discipline and again, leverage the unique position we’re in as an industry leader. And I think, John, I think our time has expired here. So I think we’ll go ahead and conclude the call. And for those of you who weren’t able to get a question or want to follow up, you can call (602) 606-6349 and we’ll try to return your call as quick as possible. I appreciate everybody who joined the call and we’ll look forward to talking to you later if you have a question.

Brad Stewart: Thanks, everyone.

Andrew Hess: Thank you.

Operator: This concludes today’s conference call. Thank you for your participation. You may now disconnect.

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