Jon Vander Ark: Yes. I think for most categories, kind of thinking about macro metric like CPPI kind of puts you in the right zone. Maintenance will be elevated off of that, just historically, it’s inflated a little faster than that. And we don’t expect the supply chain to be fully caught up or reconcile in 2024, which means we’re going to be driving some older equipment, and that’s going to be at the end of the curve where maintenance cost is higher than it normally would be. So that would be the one, I think, is going to be elevated. Everything else kind of think about that, where you see inflation going? And if that’s 4%, 4.5%, whatever that plans, that’s kind of where we’ll build a budget against that.
Stephanie Moore: Okay. That’s helpful. I appreciate it. And then I just wanted to follow up a little bit on the commodity basket exposure. Can you talk a little bit about how that basket is trending today? Maybe how that compares to 4Q of last year? I know there’s some puts and takes to the various components. So that would be helpful. Thanks.
Brian DelGhiaccio: Yes, sure. So as we said, our average commodity price for the third quarter was $112 per ton. Right now, we’re expecting about $10 in the fourth quarter. That compared in the prior year for the fourth quarter, we were at $88 per ton. So we’re expecting a year-over-year increase of about $30 a ton in the fourth quarter.
Stephanie Moore: Guy, I’ll leave it at that. Thank you.
Operator: The next question comes from Tobey Sommer with Truist. Please go ahead.
Tobey Sommer: Thanks. To kind of follow-up on a recent question, but ask it from a different angle. If you think about some of the pressures on margins smaller players that might be potential acquisition targets. How do you anticipate trends in a few buckets impacting their financial performance and maybe desire to sell? And I kind of — I’m thinking of inflation in terms of their costs, the ongoing requirement and necessity to invest in technology. And then as you just mentioned, I think fleet and supply chain won’t fully be normalized. But if you apply those things to sort of the other side of the equation, not your own business, but those that you may look to incorporate in your business, what do you see?
Jon Vander Ark: Yes. The pipeline for acquisitions is strong, both in recycling and Waste and Environmental Solutions. This is the cost pressure, which is started to abate for the smaller players is on the labor side. So they’re starting to get less pressure there as we’ve seen turnover come down and labor availability go up. It’s still elevated versus historical norm, but it’s gotten easier relative to a year ago. The supply chain hasn’t and that’s certainly becoming constrained. And anybody who was a spot buyer of vehicles is really in a challenged spot certainly through the end of next year and probably in 2025 or 2026, depending on how they — how fast the supply chain can recover because they’re prioritizing all of their base customers who buy a large number and a similar number of trucks every year.
So we certainly see that as an advantage. And then digital, I’d say, has just been a building trend over the last five-plus years that I think is going to be with us for at least the next five and probably a much longer period than that, which is that we’re making over a series of years, between capital and OpEx hundreds of millions of dollars of investment to our digital footprint to make the experience better for our customers and employees, and that certainly has a scale advantage for us. and also a skill advantage of investing in the resources we want to take those technologies and apply them in a way that make our customers’ lives and employees lives better.
Tobey Sommer: And then just as my follow-up. I know it’s been in the news, maybe even too much ad nauseam. But GLP-1s in the market, looking for second, third, fourth, all the way to nth derivative impacts. Have you looked at that in have any sort of preliminary view on what that could mean for volumes over what would probably be a very long-term? Thanks.
Jon Vander Ark: No. We’ve not done a lot of work on that yet, plenty in front of us right now, obviously, is that continues to be a major trend. We’ll think about that. But I’d say we’re in the tertiary or beyond in terms of the impact of those.
Tobey Sommer: I appreciate the response. Thank you.
Operator: The next question comes from Kevin Chiang with CIBC. Please go ahead.
Kevin Chiang: Hi, Thanks for taking my question. Just in regards to the M&A pipeline within Environmental Services, I think up here in Canada, there’s been the Competition Bureau is trying to prevent the merger to I guess, I’ll call them energy waste service companies here. So it looks like there’ll be some assets. Just wondering how the pipeline looks up here in Canada. And — and is energy waste services in an area of growth for you or accelerated growth for you when you look at your opportunities in Canada?
Jon Vander Ark: Yes. We’re certainly looking at opportunities in both U.S. and Canada. That probably isn’t at the top of the list. We’d be more opportunistic in that side of environmental services.
Kevin Chiang: Okay. And just I get the pricing, I guess, it sounds like the pricing opportunities that you’re going to move from something that you’re doing it three, four times a year within environmental services to once a year, which is maybe more regular as inflation starts to or continues to subside here. But just given the pricing opportunities that you’ve talked about and the ability to get pricing more aligned with how you think about pricing within solid waste, just why not push that lever more if you can, or did you feel the customers were starting to push back on maybe the frequency in which you are coming to them with price increases within ES?
Jon Vander Ark: Yeah. No. I mean, yes, it’s a big and diverse space. So there’s been places where we’ve pushed past the price line we would have wanted to. We’ve lost some volume, which I congratulate the team, obviously. You don’t understand the sealing on price until you take it there. And listen, in certain parts of the business, we’ll get into more of an annual increase for our bigger customers that’s contracted, for example. In other parts of the business, particularly the more field facing field services, those are things where it’s really dynamic pricing, because every opportunity event job, you’ve got a lot more flexibility there. And we’ll certainly test the market and see what the market bears in terms of opportunity.
I’d say underneath that, too, there’s a big mix opportunity, which is just looking at the types of jobs we do, looking at the customer mix and making sure we’re prioritizing our sales team around the most attractive customers and then conversely deprioritizing around customers who aren’t willing to pay what we think is a very fair value for what we deliver.
Kevin Chiang: That makes a ton of sense. Thanks for taking my question, and best of luck as you get through this year.
Operator: At this time, there appear to be no further questions. Mr. Vander Ark, I’ll turn the call back over to you for closing remarks.
Jon Vander Ark: Thank you, Betsy. I would like to thank our more than 40,000 employees for their continued commitment to providing our customers with first-class service to create a more sustainable world. Have a good evening and be safe.
Operator: Ladies and gentlemen, this concludes the conference call. Thank you for attending, you may now disconnect.
