Schneider National, Inc. (NYSE:SNDR) Q4 2022 Earnings Call Transcript

Mark Rourke: Yes, there’s a host of those there – and certainly we believe – we look for build miles per tractor per day. We look at contribution across those assets per day. We look at net revenue for order differences and in our brokerage business. So, we have a series of metrics that really focus our associate base who can impact those metrics to include our professional driver community and how that benefits the entire enterprise to include themselves. And so, we have great visibility to those, and those are distributed and embedded in everything that we do in our operational approach to the business.

Ariel Rosa: Got it, okay wonderful, thanks for the time.

Operator: Our next question comes from Tom Wadewitz with UBS. Please proceed with your question.

Tom Wadewitz: Yes good morning. So Mark or Jim, I wanted to ask you about your thoughts on the competitive dynamic in Intermodal. I know you’ve had a few kind of questions broadly along that line – along those lines. It does seem like the backdrop is weak in the near term, just given the imports being down. I think that the competitors you want to grow, other big players want to grow. So – how do you think that the kind of big intermodals will – names will play it? Do you think that there is a risk of – everybody focuses on volume, you all have flexibility with the rail partners and you kind of push price down? Or do you think there’ll be maybe ability to accept weaker volumes for a period and just kind of focus more on preserving price. I mean I guess it’s a couple of big players and the competitive behavior does matter?

Jim Filter: Yes, Tom. Well, we certainly already felt the competitive dynamic here in terms of demand in the fourth quarter with extreme decline and imports into the West Coast. So I believe we’re already experiencing that type of situation. And you’ve seen that when you look at our revenue per order, up 7.5% year-over-year, up sequentially despite the weakening demand. So I don’t believe that we’re seeing a situation where everybody is going – needing to move every single container, a little bit different than over the road where you have a driver and you need to get, that driver moving. You have the ability to take capacity out of the marketplace and just by stacking containers, and it appears that across the industry, there’s been some of that.

Mark Rourke: So I think, Tom, as you look at our 2023 approach here, we don’t anticipate at this juncture of adding container count. We’ve done a good job in ’21 and ’22 of building our containers, and we’re really focused on the asset throughput in conjunction with our rail partners and looking to focus on as the productivity yields and being a really good alternative to over the road. And that’s why it’s so important that we serve it well and the connection between the UP and the CSX and the efficiency factor, all of that matters because that allows us to put a very truck-like experience, particularly all the investments that they have made to improve fluidity. And so that’s what we’re focused on, and we won’t be adding container count this year.

Tom Wadewitz: So okay that’s helpful. So you think that even as you go through the contract season, I wouldn’t expect the rate pressure to show up in 4Q because you’re not – you don’t have new contracts coming in, right? But even if you look at the bid season and contracts, you think that you’ll have a pretty good amount of discipline. Do you think that, that results in maybe intermodal contract rates being down a lot less than truck? And then I guess just one more element to that, and I’ll pass it along. What about the – how mindful should we be of storage revenues – assessorial revenues rolling off? Is that a real headwind in Intermodal or is that something that it’s not really that big a deal? Thank you.