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

Jim Filter: Yes, thank you. So it’s really based on both of those factors. First, the largest opportunity is clearly over the road conversion. And we’ve seen this swing towards more over the road than intermodal over the last couple of years. But I believe as the country has set an objective to remove carbon emissions by 50% by 2030. The fastest way to do that is by converting to intermodal. And expect as we get closer and closer to 2030, that there’s, more customers that are going to be feeling the pressure to reduce their Scope 3 emissions. And we’re going to be darn available with the capacity to help them do that. And then certainly, we feel really good about our position relative to our other intermodal competitors, whether they’re asset-based or non-asset based. So, we don’t feel that converting from over the road that we would see a slip back that it’s being one-by-one of our competitors.

Ariel Rosa: Got it okay very helpful. And then just for my second question, I wanted to ask about the potential for efficiency gains, particularly on the truckload side. I think during COVID, when supply chains got really tight, obviously, we saw some inefficiencies kind of creep into not just for you guys, but for many carriers, whether it was higher deadhead miles, higher unseated tractor counts, to what extent do you think that can kind of reverse in 2023 or to what extent has that already been in the process of reversing? Maybe you could just touch on that, it would be appreciated?

Mark Rourke: Yes, we think asset productivity and people productivity is our largest self-help item as we “return to something more normal.” We are seeing improvement the efficiency factor and how quickly boxes are turning. We’re not back to pre-pandemic levels yet and intermodal, where Jim mentioned earlier. But we are seeing improvement and less friction in the supply chain, and we need to take advantage of that. While we still expect some allocation constraints with our OEM providers. Those are improving slightly, and we want to get more efficient equipment, higher – excuse me, lower cost per mile, maintenance is associated with getting some catch-up in our age of fleet. But whether it’s our tractor, whether it’s a trailer, whether it’s a container, we believe we have some light at the end of the tunnel here that we would expect to start to see some reversal of some of the erosion we’ve had because of all the supply chain and the friction issues that we’ve experienced to include the nice progress our rail partners are making relative to crews and the investments.

The UP has done a terrific job on some of the technology advancements that they’ve made to make us more efficient with our dray fleet in and out of rail terminals. And if we can make them more efficient and make ourselves, we all win in that environment. So our alignments are very closely aligned. And I am really, really pleased and impressed with the commitment that the UP has made, and we’re seeing the benefits of that very, very early in our relationship here. So that’s we’re focusing the entire organization on how do we address some of this inflationary impact and asset productivity as our best remedy.

Ariel Rosa: Is there any way to quantify the magnitude of that benefit or maybe if you could give us like a data point or two in terms of what some of those efficiency metrics might have looked like and to what extent they can improve in ’23?