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

Jim Filter: Yes and it does appear that spot rates have really found a floor, and there’s some movement around there. But at this point, we do see signs that capacity is leaving the market at these levels. And so the question is, if demand returns in the second quarter that’s probably less of a shop and if that occurs in the fourth quarter at the back end of the year, it would be – a recess that would be a larger shock. And so as we’re talking to, customers, that’s the dynamic that they’re thinking about is at what point does demand start to return? What impact does that have? They’ve gone through some dramatic shifts over the last couple of years. And so while balancing the opportunity to reduce costs today versus exposing their organization to risk later in the year. And so that’s the dynamic that they’re playing.

Brian Ossenbeck: All right thank you. So just a follow-up on that with the capacity leaving the market, what are you seeing specifically there? I know when we first saw some of the owner operators leaving – I’m sorry, people leaving to go in their own front operators back in I call it like ’20, I guess, that was the first sign of things getting really tight, assuming some of them are coming back or maybe they’re still coming back. So is that one of the data points that you are viewing in terms of monitoring capacity? What else are you looking at that? And is it a purge or is it just continued kind of grind out of some of the excess that might have been built up over the last cycle?

Jim Filter: Maybe a little bit more of a Grind, there’s a variety of different factors that we’re using across our organization to get data points to understand what’s going on with capacity. But I would indicate that there is more of a Grind out exiting the marketplace.

Mark Rourke: Yes, we’re monitoring things of defaults on leasing of units that looks like through our channel checks that that’s back to pre-pandemic levels, which was quite muted coming through the pandemic era, also insurance renewals and the number of units being renewed versus prior. So there’s a number of signals. And again, these are the public, I think, the government employment stats may be a dip lagged. And so we’re trying to get what’s more real time and looking for some of those other signals. And those channel checks, Brian, I think, would suggest that we’re seeing an accelerated on that small carrier front on some of those indices.

Brian Ossenbeck: Okay, Mark and Jim thank you very much, appreciate it.

Jim Filter: Welcome.

Operator: We have reached the end of the question-and-answer session. I would like to turn the call back to Mark Rourke for closing comments.

Mark Rourke: Great, I preach everyone’s time and attention and day. Let me just close by referring you if you have an opportunity to go to Page 12 of our updated investor presentation. Our strategy is to be disciplined in our deployment of capital to enhance shareholder returns and grow this enterprise. And to achieve that, we have outlined our key – strategic growth drivers of Dedicated, Intermodal and Logistics. And obviously, we had a chance to talk about that today. While our priority is on organic growth first, we are actively pursuing the right acquisitive opportunities that advance those priorities, and we’re continuing in this environment to evaluate our whole enterprise for cost-saving opportunities and maximize our operational efficiencies to expand our margins.