Okay. All right, we're gonna get going with our next session with Hub Group. Really happy to have Phil Yeager, President and CEO, and Kevin Beth, the CFO. Gonna pass it to Phil for some opening comments, and then we'll get to some questions. Thank you, Phil and Kevin, for being here. No, Scott, thanks very much for having us again. We're excited to be here. Just for those of you who don't know us, Hub Group's a supply chain solutions provider. We work with large retail, consumer products, and industrial companies across North America. Break ourselves down into two key segments. ITS is more of our asset-based solutions, intermodal being the largest portion of that. We have 50,000 containers, 2,400 drivers across the U.S. We align with Union Pacific and Norfolk Southern on our rail strategy, and have been very successful there since our founding. We also have a dedicated trucking operation, high service sensitivity, distribution centers, store deliveries for mostly retail clients in the western portion of the U.S. About 1,000 drivers and 5,000 pieces of trailing equipment. Our logistics business has been growing quite a bit, both through organic growth as well as an acquisition strategy. We like non-asset logistics. High free cash flow generates a lot that we can reinvest back into the business. Brokerage is the largest portion of that. We have a very strong dry van product, but also some differentiated refrigerated and LTL products within that as well. We have about 11 million sq ft of warehousing space across North America, mostly LTL consolidation for our customers. We also have a managed trans business, where we manage about $2 billion of LTL for our customers. And then, we recently doubled the size of our big and bulky Final Mile business with the acquisition of Forward Air's Final Mile business. Got us into the appliance space in a much larger way. All of this, we think, leads to a really strong balance sheet for us. We're very low on our leverage and have deployed a much more growth-oriented capital allocation strategy. First, in investing back into our core business, in technology and equipment over time. Continuing to pursue non-asset logistics acquisitions, we think adding scale as well as differentiated service offerings will help us continue to get deeper with our customers' supply chains. And then, we've started returning capital to shareholders in a much more consistent fashion, issuing a cash dividend, a stock split, as well as more consistent share repurchases. So we think we're in a great position, as both now, with our current balance sheet, and can be very opportunistic in how we're investing. But also, as we see the cycle return, we're excited about our opportunities ahead. And have great customers, great management team, and, you know, once again, just appreciate being here and the opportunity, so thank you. Fantastic. So I wanna start on the just macro side. You talked about on the Q1 call a pretty dramatic inflection volume, right, in April- Yeah. - up, I think, 16%. Sure. Right? That seems to be different than what at least others in the domestic intermodal market are seeing, saying. Why? What is causing this? And then, I don't know, any update on, are we seeing that strength continue so far in May? Mm-hmm. Yeah. Sure, yeah, so I can start, and Kevin can add in. You know, I think at the end of last year, we had highlighted that during this time in bid season, the prior year, we had not really moved on rate as much as we probably should have, right? And so we said we're very clearly that we were going to be looking to garner some volume back. We think we've executed on that. Volumes were still down double digits in Q1, but we did see double-digit growth in April. We've also had five or four straight months of sequential volume growth. We think May will be similar to that, and we'll continue to see a strong trend. I think, you know, the best part about this has been the conversion we're seeing from truckload and shorter haul markets, and particularly in the East. We're also seeing some really strong cross-border growth and with Mexico, and so we're bullish on how we've performed in bid season. We've been ahead of the targets that we've set for ourselves, and, you know, as we add volume, that helps with our cost structure, and bringing costs down, adding productivity with our drivers, filling in empty repositioning costs. So we're excited with how we've executed thus far, and, you know, but it remains a challenging market. I think it's still quite competitive, but we're doing quite well, and I think with the changes we've made to our rail contracts and insourcing more drayage, all those items are helping us to be more competitive, and really focusing on taking that share from over the road. Any thoughts? Are you seeing that strength in April? Does that continue to May? Yes, very much so. Yeah, yeah, we're, we're excited about how May has progressed thus far. You know, nothing, you know, really to report around numbers or anything. We still have a little bit to go here, but, but it has been another. We, we anticipate May will be another sequential volume growth. You know, when we think about this in the context... And a lot of this, it sounds like, is coming in the East? Yeah. There's a significant portion of growth in the East, yeah. Which, right, is the more truck-competitive part of the network. Mm-hmm. Right? So, and truck rates feel like they're under pressure- Mm. Still, right? So I guess, how is this the conclusion that, you know, we're having to give up price in order to get this volume? Yeah, so I think, you know, during the call, we said we think pricing for the full year will be down about mid-single digits for our reset pricing. Obviously, to get growth, it's still pretty competitive, but we anticipated that we'd be down more in this front end of bid season, and renewals would be relatively flattish as we enter this latter portion. And that, we still anticipate that that's likely to be the case. Obviously, you know, I think the truckload environment has remained competitive, but we are delivering an excellent service product in the eastern portion of our network. It's the highest on-time performance levels I've seen since I joined the company. And I think the cost takeouts that we've had, both in our rail contracts, in the way we're managing our drayage, in the way that we're utilizing our containers and reducing empty repositioning costs, I think are all coming together to drive our ability to continue to take share. And so that's really the focus right now. ... and so let me know if this makes sense or how I think I'm hearing this. So as we're repricing something today, right, the rate is coming down from where it was priced a year ago. Is it sort of coming down from where you were repricing stuff two, three, four months ago? Is it meaning- No, no. We continue to see sequential pressure? Yeah, it's not deteriorating. Yeah, I would say sequentially, the price has been pretty consistent now for two, three quarters. And I'd just like to add, you know, one of the things, and where we are pricing, too, is to make sure as Phil talked about, decreasing those empty repos and utilizing our equipment more, and we've been able to do that with some of these bid wins as well. Okay, so as we get to the tail ends of bid season, it sounds like you think the pricing would be more flattish, is what you're saying? Absolutely. Yeah. Yeah, that's, that's consistent. Now, and just from, like, a mix standpoint, though, if more of the growth is local East, does that naturally put pressure on revenue per load? So- Absolutely. Hundred percent. If price is down five- Yeah ... then rev per load is down more than five. Yeah, so there's two factors you've gotta think about there. It's the length of haul, it's definitely gonna impact revenue per load, as well as just fuel has been a little bit of a headwind on a year-over-year basis to start the year. In Q1, it was pretty impactful. Yeah, it was $32 million decrease year-over-year in fuel alone in Intermodal, $40 million consolidated at Hub Group. From revenue ... from a revenue perspective- Year-over-year ... year-over-year in fuel, yeah. Is it an earnings impact, though, or really just a- No, it's pretty close to flat on a margin perspective. You know, depending on the customer, you know, some customers, you have a little bit of an impact, but pretty neutral. So, a lot of the growth in the East. How come on the West, we're seeing some really good imports into the West Coast? Why is that not translating into domestic intermodal volumes on the West? I guess, why aren't we seeing more transloading? Yeah, and you know, I think our eastern growth has been more dramatic. Our western volumes and Transcon volumes have been performing quite well, and through even the entire cycle, Transcon has been the best performing portion of our network. Typically, when you enter a new year, like we did in January, obviously, you're selling equipment out of Southern California and the PNW, not having to reposition in. So we've actually been empty repositioning in, and really focusing on getting loaded containers into the West Coast the entire year. So our deficit has been quite consistent and, and- Mm ... kind of counter to what we've seen historically coming out of the end of the year. And so, to me, that is an indication that although IPI is much more competitive, and you're certainly seeing that in the international intermodal volumes, I think, the transloading activity has been pretty well sustained and should lead to some nice growth as we enter the back half. And then, I don't know if you have any visibility or thoughts on this. We've certainly seen a pretty meaningful spike in ocean rates in the last month or so. Is that a sign that there's a lot of volume that's gonna be coming, or is it more of a supply issue in ocean that doesn't necessarily mean that there's a wave of volume coming our way? I think part of it is certainly opportunistic pricing from the steamship lines, right? I think they, they've been looking for those opportunities, but at the same time, that tightness of capacity typically indicates that there is gonna be some demand coming. I think what we've seen on the West Coast in particular has been more sporadic demand. It's been, you know, one target will go and have a large surge for a few weeks, and then you see another customer come in with a large surge for a couple of weeks while the other might have slowed down a little bit. So it's been kind of inconsistent volumes. Discussions we're having with our customers do point to some semblance of a peak. It depends on end market. You know, our home improvement retailers are a little slower, but our big box and discount retail customers are pushing a little bit harder. So I think we're hopeful that it does lead to some tightness in capacity. As I mentioned, we're repositioning, and so if we have to add incremental capacity to that, that means we need to get a return on it. And so we'll be looking for opportunities to kind of take on the demand but also improve yield. Any thoughts on East Coast, West Coast port share shifts? We've got Panama, Suez, we've got ILA labor contracts. What is this? Yeah, yeah. What are customers telling you? Discussions with our customers have been mostly, you know, looking to mitigate risk and push more into the West Coast. You know, I think the timing of the labor negotiations that'll be taking place out East are, you know, concerning to several of our large retailers. And so while over the past several years, there's been more of a diversification away from the LA ports for the exact opposite reason, or the same reason that the East Coast is dealing with, I think you'll see that share shift really bounce back to more of a diversification back to West Coast this year. Are you hearing anything about, because of ILA, East Coast, early peak season or Biden tariffs coming? Does that having an impact on what customers are telling you at all? I think that it depends on the inventory situation of the customer, that merchants, given some of the inventory gluts that they've had over the past several years, are being pretty cautious on the consumer, pretty cautious on ordering, which likely leads to more, if the consumer is holding, more rush ordering. I don't anticipate it's gonna be a huge pull forward. I think it'll be more of that rush ordering that we wind up seeing later in the peak season, which, you know, can be good for us. Sometimes it avoids transloading. If you have too fast of a push, it has to go into a truck or... But, I'm certainly hopeful that, you know, it's kind of that just in time that fits well with intermodal. Yep. I wanna ask about just the broader competitive dynamic. You were in the session earlier with BN, and I saw you- Mm-hmm ... sitting there listening. Yep, and I asked them, there's a question in the market, right? Maybe UP is talking about shorter transit times. You and UP have both talked about new rail, the way the rail contracts- Mm are structured a little bit differently. And so I ask, is the perceived competitive advantage that BN and J.B. Hunt have in the market, is that sort of advantage dissipating, moderating in some way? I'll ask you: do you feel like you're, through your rail partnerships, are, are you able to be more competitive, or did you perceive that there was some competitive disadvantage in the market that now is not the same? Or you, you know, I don't know. Yeah, sure. Yeah, I mean- That's the spirit of the question, right? Sure. Yeah, no, I get it. You know, I think there's a few things that we've always said were really important to driving intermodal modal growth over the long term. One was a really strong service product. Not the sporadic service that we've had over the past, but consistent. If we said we were gonna be truck plus one or truck plus two, hitting that service every day, and we're getting that right now, so I think that's a huge deal as we think about long-term growth. I think about capacity as well. But the second piece was always around pricing, and as you recall, you've known us for a long time, our rail costs used to always just go up, and that was pretty tough to compete and hold on to volume. With both of our rail partners, we have structured new arrangements where we do see some movement with the market, and that has certainly helped us to compete more. I also think there's a lot of things that we've done really well to enable us to compete more as well. I think we've insourced a significant portion of drayage. If you looked at us a few years ago, we would've been around 60% of our own drayage moves would've been done with Hub Group Trucking. But at the same time, it was probably 70% independent contractors, so our service product wasn't very strong. We've now flipped that, where we're closer to 80% now of our own insourced drayage. That's mostly company drivers. We have a controlled service product, better service, better cost. We've also restructured our chassis arrangements. Where we used to go through rail-owned chassis, we're now using another provider, so we kept the asset light portion of our business that contributes to our free cash flow profile. But we just don't think that chassis are a very good return investment, but it enables a better cost structure and a better service product. So all those things together, and then you take how we're just managing them more tightly. We reduced our empty repositioning costs 20% year-over-year in the first quarter. Our cost per dray was down 15% year-over-year in the first quarter. These are all things that we're utilizing to now go out into the market and improve our positioning. So certainly, rail contracts is one of them, but I think we've also done a lot of really good things ourselves to position the company for growth. Just so we understand these rail contracts, to the extent that there's still a little bit more pressure on your own price, will your rail costs continue to reset a little lower, or are you already sort of, you know, at a floor in terms of where your rail costs go? Rail costs should continue to go lower this year. Yes. Sequentially, we're expecting them to decrease, you know, as long as the market continues to stay where it's at. How should we think about, like, what that lag is? Is it months, quarters, year? I don't know, in terms of how the contracts are structured. Yeah, I don't wanna go too much- Yeah ... into the detail of it. I think, you know, you start to get into some of the things that- Okay ... you know, I probably shouldn't talk about. And I appreciate the question, but I think, you know, for us, it's, there is a lag effect, I could tell you that. And that's why I think you're seeing, you know, our costs are continuing to go down. I think you'll see that likely continue throughout the, the year, and as we look ahead, we have good visibility that could-- that likely could be occurring in 2025 as well. So there is a lag effect, but, but at the same time, it's giving us a much better opportunity to continue to compete, take share from over the road, take share from non-asset IMCs, and I think, that's coming to fruition. Am I thinking about this right, that, you know, at some point, right, the market is gonna inflect, and your price is gonna start moving higher? Mm-hmm. Does that lag still play out, where there's gonna be a quarter or two where your pricing is going up, but your rail costs maybe still come- Yes ... down sequentially, and so we could see at some point, right, a pretty big snapback in margin? Absolutely. Yeah. You've seen the downside case of it. Yeah. I think, you know, rail cost for us is about 50% of an intermodal move, right? You apply the same math on the inverse, there should be a pretty strong inflection. Yeah. You put that lag into it, yes, we, we would agree. And so, when I look at just our model, right, Q1, you did a 2.4% ITS margin. Yep. Right? We're modeling 2.4-2.5,- 2.5,- 2.5, so we've got margins staying flat basically all year. Yep. It gets us to, like, the low end of your guidance, so I guess it feels like you're... You've done a pretty... my perspective, you've done a pretty good job of, like, de-risking your guide at this point, but what are the... I don't know if you agree with that. What are the upside- Sure ... downside risks. Yeah, no- ... to your guidance? You know, we certainly think that, you know, our ITS margin should stay within a couple basis points of where it's at today. You know, as Phil mentioned, you know, we've taken out a lot of cost, right? Our chassis agreement has in the West reset, and we're fully on that now. We're utilizing our equipment better. We had 8% increase in our box utilization during first quarter, and we're continuing to see those amounts stay where they have been or even improve. Our driver utilization and productivity is the highest that I've really recall seeing in my 20 years. So we've really been able to do a lot of things on the cost side. You know, as Phil mentioned again, rail costs are coming down, but that is only 50% of the overall cost aspect of an intermodal move. But, you know, we believe the way that we're pricing is to stay, you know, where we're at from a margin perspective. Okay. The other thing I'd highlight just is our logistics margins continue to be quite strong. I think, you know, we tried to diversify our suite of services, with that in mind, that it could be more resilient in a downturn, and I think that's certainly played out for us, and, you know, we anticipate we'll continue to grow that business. Again, your point about intermodal margins staying flat over the course of the year, that... sounds like that's not assuming any price improvement, right? Correct. Right. Yeah. You get- You know, you asked, you know, what could change that? Certainly, there's upside if there is a surcharge. You know, if there is a peak season where there's a surcharge, you know, that would be all upside. And, you know, same thing on any price inflection point with the truckloads changing, then we would be able to pivot real quick and see that growth there. How come... Sounds like we're seeing sequential volume every month. How come that's not driving margin higher? Is it that there's still a little bit of pressure on prices or is that- Sure, 100% it is. Yeah. Yeah, that- Okay ... mid- to single- You got it. ... decrease in price. How do we think about mid-cycle margins now, right? It's been... You know, you got to some really healthy ITS margins, now we're back towards that, you know, 2% range. What's... You know, we don't, unfortunately for ITS, we don't have a lot of history in terms of- Mm-hmm ...that specific margin, right? So what do you think is the right- Yeah, you know, ... mid-cycle margin? I think one of the things, you know, that that we would look at, you know, from a consolidated standpoint, I think Hub's done a great job. You know, the last trough in 2017, we've now doubled our OI, both on a dollar standpoint and margin percentage standpoint as well. You know, the logistics segment that we have is very stable, the very high sensitivity to service as opposed to price, and that's in our managed transport business, our Final Mile business, as well as our consolidation fulfillment. So, you know, those are really going to allow us to stay at the margins that we're at. But really, when the market changes, both our brokerage and our intermodal should have a lot of upside as the market improves. Mm-hmm. And we think, you know, that kind of... if you think about we're at 5% in logistics today, the upside there is maybe closer to, you know, call it the upper end of mid-single digits, while ITS is gonna fluctuate a little bit more, but could get to kind of more that high single-digit% if you see the market really inflect positively. So I think, that that's the view we've had. How is the Forward Air Final Mile acquisition going so far? It's been fantastic. I think it's been a great fit for the team. I think they're excited to be a part of Hub Group. We've done a fantastic job cross-selling and utilizing the facilities, utilizing their ISP model versus our carrier model. I think it's been a great mix as well. And we've found great opportunities for cost, but mostly it's been around growth and been out with their sales team on several calls, and it's really a great service product. We're winning in the market and feel great about the business. How much of logistics now is just vanilla truck brokerage? Well, I think our brokerage, we wouldn't necessarily just define as vanilla. But, I- I knew that as soon as I asked it. No, no, no. No, it's okay. And, it's a good point because I think we're a little different. We're under 40% of our brokerage dry van, and the remainder is refrigerated LTL, flatbed, which have a little bit more, a little bit stickier margins and a little bit more of an opportunity to retain customers through a cycle. So if you look at the logistics business, it's probably, what, 40% is brokerage? Yep. And, of that, under 40% is dry van. And the other 60%, your point is, the margins and the earnings are not showing the same sort of... I'm sure they're under some pressure, but it's not the same degree of cyclicality as we're seeing- Yeah, that's correct. Yeah. That's that service product. Those other vanilla- Right. That's that product, the service, and that stickiness of those other customers. You know, one of the things in our acquisition strategy is, on those logistics business, be able to cross-sell that business into brokerage and into intermodal, and we've been successful with that. And, you know, and the Final Mile of Forward Air business is another example that we're excited to start seeing some of those cross-sell opportunities take place. And just with those acquisitions, we're always feeding our different service lines. If you look at Forward Air's Final Mile business, they controlled none of the middle mile for their customers. So we're now able to come in, provide intermodal service, provide brokerage services. That feeds that business. Our managed trans business tenders business to our intermodal business, to our brokerage business. It helps us be a little bit more resilient, we think, through some of these cycles, as well. Let's talk about CapEx and Free Cash Flow. Yep. Right. Pretty low level of CapEx this year. Good Free Cash Flow. Just how sustainable is this sort of reduced level of CapEx? Sure. Great, great question. You know, on the largest CapEx for this year is still gonna be tractor replacements. You know, we're always going to invest in our business, and safety and maintenance cost are one of the high priorities of making sure that we have a effective fleet and a safe fleet. But the reality is right now we have a lot of containers, and we have excess capacity, both by the amount of turns that we could improve on allows us to have capacity with our current fleet, and we do have some capacity stacked. So we really feel that definitely this year, and probably next year, you know, there won't be a need for any additional purchases when it comes to containers. So, you know, we expect the levels of CapEx to continue for this year and 2025. And so, maybe, Phil, let's spend the last couple minutes thinking about what we wanna do with that Free Cash Flow. How do you balance buyback versus M&A? What would you... Where, where's the preference right now? Yeah, and Kevin, I think, you know, feel free to jump in, but I think, our first focus is always gonna be on driving growth in the business. You know, I think we wanna position to the company for the long term, whether that's organic growth capital, technology investments, asset-light acquisitions that put us in a position to deepen our value to our customers and help improve the cyclicality of our earnings. But to your point, we are generating significant free cash flow. The dividend has been, I think, a nice way to reward shareholders. And as you've seen through the first two quarters of our authorization, we have been out in the market purchasing shares opportunistically. So we wanna strike the balance where we also are moving towards our leverage ratio that we put out there of 0.75-1.25 times net leverage. But also make sure that we're maintaining a balance where we can be opportunistic on M&A as well, because there are going to be some very interesting opportunities that we think come out with more depressed earnings, and therefore an opportunity to catch some significant accretion on the upside, so- Scott, I would just add, you know, I think we're in a unique position. You know, we have net, net debt ratio of 0.4%, and at times, I should say, excuse me. And like Phil said, you know, that's below our what we've given as a range that we're comfortable with. We're at net debt right now of $142 million. We have $195 million in the bank and a full $350 million of revolver. So we think we're in a unique position to really capitalize on some assets that come to market and continue growing through M&A, as well as continuing our capital plan of, you know, going and buying shares back. We did $33 million worth of either dividends and a combination of dividends and share purchases in first quarter. But I guess, you know, given the multiple you trade at, you don't find that buyback is more attractive than... I mean, I read it. We think it is quite attractive, which is why we've been executing on it. You know, I think at the same time, we wanna maintain a balanced approach, you know, and not... You know, I think being in the market, but being balanced is right for us for long term and gives us the ability to be flexible when we get these really exciting acquisition opportunities that are coming our way. I would tell you, we have a very robust pipeline, so we're excited about, you know, what we're gonna be doing in the back half of the year there. I know, just going back to just market dynamics for a minute, I know it's not a big part of your business within, you know, van brokerage, but any signs of life in that market? Any kind of green shoots we could start thinking about? Yeah, I would say, the Southeast has been pretty tight, as of late. You're seeing some spot market activity pick up here, just with, you know, we had DOT Week, we had, you know, some produce, in the Southeast creating some tightness and, and some rate opportunity that leads to a little bit of short-term compression on, on margins. But, you know, it wouldn't be anything I would call... I, I, I would be ready to call as a, you know, a trend. But, but at the same time, I think we're, we're excited to see that, at this time last year, there was no pop, coming from, from the Southeast produce season or, or really anything associated with that or DOT Week. So at least good to see it heading in the right direction there. Great. All right, I think we're gonna have to wrap it there. Thank you so much, Phil and Kevin. This was great. Really appreciate it. Thank you, guys. Thank you. Thank you. So, up next is gonna be Johnson Controls. Nigel will be moderating that one, so you'll get some more intelligent questions. Thank you, Phil.