Good day. Thank you for standing by. Welcome to J.B. Hunt 2021 second quarter earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one on your telephone or touch tone key. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to your first speaker today, Mr. Brad Delco. Thank you. Please go ahead, sir. Good afternoon. Before I introduce the speakers, I would like to take some time to provide some disclosures regarding forward-looking statements. This call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as expects, anticipates, intends, estimates, or similar expressions are intended to identify these forward-looking statements. These statements are based on J.B. Hunt's current plans and expectations and involve risk and uncertainties that could cause future activities and results to be materially different from those that's set forth in the forward-looking statements. For more information regarding risk factors, please refer to J.B. Hunt's annual report on Form 10-K and other reports and filings with the Securities and Exchange Commission. Now I would like to introduce the speakers on today's call. This afternoon, I am joined by our CEO and President, John Roberts. Our CFO, Executive Vice President of Finance, John Kuhlow. Shelley Simpson, Chief Commercial Officer and Executive Vice President of People and Human Resources. Nick Hobbs, our COO and President of Contract Services. Brad Hicks, President of Highway Services. Darren Field, President of Intermodal. At this time, I would like to turn the call to our CEO and President, Mr. John Roberts, for some opening comments. John? Thanks, Brad. As we open our earnings call for the second quarter of 2021, it makes sense to consider our comparison data with recognition for where we all were this time last year with the onset of the COVID virus. That said, we will continue our discussion on our views of our progress across the enterprise. A general term we believe fits our current position is momentum. We noted for you during our last call that we have meaningfully increased our equipment orders for containers and intermodal and trailers for the J.B. Hunt 360box program. Through the quarter, we gained confidence in these decisions and are working with our vendors to accommodate delivery of this equipment throughout the balance of the year with a keen focus on being able to meet the needs of our customers as we approach the traditional peak season. This is a fluid situation, and we are deploying some new and creative ideas for ongoing equipment delivery. Shelley Simpson will add color for us on how we plan to work with our customers heading into the second half of 2021 and 2022. A high-level overview provides visibility for us to see that the company increased revenues, operating income, and earnings per share in total and in all segments compared to the unusual second quarter of 2020. Further review shows that Intermodal, Dedicated, and Truckload all increased both revenue and operating income over Q1 of this year. ICS and Final Mile Services increased revenue but failed to increase operating income when looking sequentially and adjusting Final Mile Services for the gain we called out in our release. As our segment leaders will discuss for you, the segments are all performing well and present solid evidence that support both our strategy to this point and what I believe to be strong momentum as we move forward from here. Given the work we had completed with our customers, current demand trends, order flows, and sales pipelines, coupled with the data revealing some of the lowest inventory levels we have seen, give us confidence in this momentum continuing. One last point I'd like to highlight is the progress the company has made in increasing our transparency and focus on our overall sustainability efforts. Under the leadership of our Chief Sustainability Officer, Craig Harper, we have recently published our first sustainability report in accordance with the GRI, SASB, and TCFD frameworks, which is easily accessed via our website. I think it's also worth noting that over the last year, our broader sustainability disclosure efforts have been recognized by SmartWay, CDP, formerly the Carbon Disclosure Project, Sustainalytics, and EcoVadis with meaningful improvements in our scoring across these platforms. Craig calls out 25 unique people internally and many more who have helped with this improvement. As noted, this is a journey and not just for a few, but for our entire organization. I will now turn the call over to our CFO, John Kuhlow, for his comments. John? Thank you, John. Good afternoon, everyone. I'd like to start with providing a couple comments on our second quarter, just from a consolidated perspective. As John noted, we were pleased with our revenue, operating income, and EPS growth for the quarter, with notable achievements in our Highway Services revenue as both ICS and JBT. They were certainly over prior year quarter, more importantly, they were carrying the momentum from their first quarter results into the second. Current quarter was significantly impacted by labor shortages, putting a strain on our ability to service demand and effectively use our assets. Cost pressures in the quarter were primarily related to higher purchase transportation costs, salaries and wages, and other costs across our networks and operations. While we are hopeful for an improvement, this still remains an area of concern. We ended the quarter with approximately $570 million in cash. On our first quarter call, we communicated our increase in equipment orders and guided our CapEx to be approximately $1.25 billion for 2021. While all orders are still in place, we anticipate some of these to push to 2022 because of the congestion on the waterways and also at the ports. We are committed to obtaining capacity to serve our customers, but our view today is that net capital expenditures for 2021 will be closer to $1.15 billion because of these delays and other challenges to equipment needs. We resumed stock buybacks on a more regular basis in the second quarter and have acquired approximately $80 million, rounding out close to $85 million year-to-date. We will continue to balance our cash spend on equipment, dividends, and buybacks through the remainder of the year as opportunities unfold and trend closer to our targeted 1 times EBITDA leverage metric on a net basis when the environment begins to normalize. As John noted, segment comparisons to prior year are difficult because of the pandemic, but I would like to point out an item for consideration on the year-over-year comparisons for salaries and wages. COVID costs in the second quarter decreased nearly $10 million from the prior year quarter, which was primarily due to a reduction in PTO for employees needing to quarantine. However, as we called out in the release, this reduction was meaningfully offset by increases across all pay items for both drivers and non-driver employees. The impact of the reopening on salaries and wages is widespread. We see challenges in this area continuing because of the importance of attracting and retaining our people. This concludes my remarks. I'll now turn it over to Shelley Simpson. Thank you, John, and good afternoon. My commercial update will focus on general market conditions, our expectations and plan for our customers' peak season capacity needs, as well as an update on the progress we are making as an organization with our J.B. Hunt 360 multimodal digital freight platform. As we discussed last quarter, we entered 2021 with cautious optimism about the opportunities the market could present to us during the year. Now that the year is just halfway over, clearly, the opportunities are bountiful, but so too are the challenges. Demand for our capacity solutions across the scope of services remains at elevated levels. Capacity across the supply chain remains tight, and challenges around velocity and fluidity are still very present and likely to persist at least through the end of the year. As an organization, we are committed to working with our customers to address these challenges together and have plans in place to provide even greater assistance as we approach peak, and that I'll speak to next. The result of the current market conditions is that demand for our trucks, containers, and trailers far exceeds our capacity to serve. Thankfully, our ability to provide value to our customers is no longer limited by our physical assets, as the power of our people and our platform allows us to source the most efficient capacity for and on behalf of our customers. This dynamic is evidenced across all of our business segments that we will be discussing during our prepared remarks. As we approach this season and peak season, we are taking a collaborative approach with our customers to ensure that we have an actionable plan to provide the capacity solutions to meet their needs. One of our biggest challenges this year, which got even worse during the second quarter, was the detention of our trailing equipment by customers across both our intermodal and Truck segments. We are addressing these issues with our customers through direct conversations and accessorial charges. In some instances, we are restricting capacity to certain customer locations. To be clear, we did not implement or augment new accessorial programs with the intent of increasing the cost of our customers. Our intent was to provide the appropriate incentive to our customers to encourage the improvements needed to be able to turn our equipment efficiently. This improvement will afford us to deliver more value to our customers by being able to provide additional capacity. To wrap up my comments on our plan for peak season, we remain very confident in our ability to execute on the plans we are developing with our customers. Our capacity and ability to service our customers will be determined by our performance around three key items. First, the onboarding of equipment orders we discussed last quarter, but specifically the containers for JBI and trailers for 360box. Second, improvements in rail fluidity and velocity. Third, improvements in customer detention or dwell time. Progress on these fronts will go a long way in meeting and exceeding customer expectations. Shifting gears to our J.B. Hunt 360 platform, we continue to see solid and record-breaking trends around user activity, engagement, and growth across both our carrier and shipper platforms. This is evidenced by our organization serving the largest number of unique customers in our history during the quarter. A tall task, considering the supply limitations and restrictions that typically exist in a market like we are experiencing currently. We believe we are continuing to build momentum as both carriers and shippers see the value in optimizing and transacting in our system in real time in an improving frictionless digital process. Going forward, our focus remains on improving access, visibility, and transparency across the supply chain, which we believe sets us up to achieve our mission statement: to create the most efficient transportation network in North America. In closing, as I look across our organization, I remain extremely proud and excited for all the opportunities we have to solve for our customers' needs. I believe we are in a unique position to leverage our people, assets, technology, and maybe most important, our experience in bringing those elements together. I like to think of that as our scroll. The power of the J.B. Hunt scroll is strong as customers continue to lean into us to help them solve for their needs. Finally, as previously disclosed, I've been given the responsibility of the role of EVP of People and Human Resources. Last quarter, I discussed how encouraged I was about the progress we are making on enhancing our inclusive culture and our belief that our organization could lead in this area. As an update, I want to share that we have hired our first Vice President of Inclusion during the quarter. We are excited about our journey ahead and the incredible progress we can make in this area. I'd now like to turn it over to Nick. Thank you, Shelley, and good afternoon, everyone. I'm going to spend my time giving a brief operational update focused on the current driver market and some other processes we are reviewing, in addition to providing some greater detail on the performance of DCS and Final Mile Services in the quarter. I'll start with some quick thoughts from our operational perspective focused on the current state of the driver market, in addition to our current review of some of our processes. Consistent with my comments from last quarter, the driver market remains as challenged as I've seen in my 37-year career. As you will hear from Darren's comments in a few moments, we believe the availability of labor is having a meaningful impact across almost every part of the supply chain, ranging from the ports to rail terminal operations, warehouse operations, and certainly over the road driver market. While we continue to believe we are in a relatively solid position with some of the best paying and highest quality jobs in the market, with over 90% of our jobs being either local or regional in our dedicated intermodal dray, truck, and Final Mile Services. The truth is we are not immune to the industry's driver challenges. We continue to make adjustments and are experiencing inflationary cost pressures with driver wages and benefits, in addition to experiencing elevated driver hiring and recruiting costs across all businesses. To close up on my operational comments, I want to provide a brief update that I am leading our efforts to review each of our vendors and suppliers to make sure we are properly aligned across our operational and sustainability goals, while also ensuring we are receiving the best value for our entire organization. Now let me shift my comments to focus on the performance of Final Mile Services. Final Mile was able to continue its streak of strong performance with revenue growth of 52% in the quarter. Operating income was $10.7 million. As disclosed in our press release, it did benefit from $3.2 million net settlement of claims in the quarter. Demand for our services across Final Mile remains strong, particularly across our big and bulky home delivery and fulfillment services. That said, availability of inventory, particularly across the appliance and furniture categories, is tempering what would otherwise be even stronger demand for our services. Going forward, we're going to remain encouraged by the onboarding of new business as the year progresses, and more importantly, remain encouraged about our pipelines, both organic and inorganic growth opportunities over the long term. As we continue to focus on the growth and scaling of the business, we will remain committed to protecting and investing in our service product and customer experience for and on behalf of our customers. I'll close with some comments on results in DCS. Our backlog and pipeline for new dedicated private fleet startups is as strong as our company has ever seen. By the end of June, we will have added 555 trucks to the fleet from the end of the prior quarter, which is the third highest truck adds we've had in any single quarter. I am pleased that we are able to onboard not only a significant amount of new accounts, but also across a diverse group of industries, all while continuing to perform within our newly established long-term margin target range of 12%-14%. We saw a 17% growth in revenue, driven by a 5% growth in our average fleet count year-over-year, in addition to better productivity, defined as revenue per truck per week, which was supported by contractual annual price escalators and the decline of idled equipment from prior year levels. Additionally, with regards to productivity in many locations across our network, we have been able to get additional funding to support the needed investment in driver wages in order to maintain performance standards and maintain our competitiveness in certain markets. While we have strong momentum with our sales and operational efforts, we think it's important to recognize that driver and equipment availability, in addition to the ability of trained and experienced account managers, is moderately governing our ability to grow faster. Operating income was down 5% year-over-year as tailwinds in the prior year related to lower driver turnover, travel and entertainment expense, and lack of startups have returned as anticipated, in addition to higher personnel costs in the current quarter. Importantly, we believe our investments to grow the business will help us carry momentum well into 2022 and beyond. To round out my DCS comments, we ended the second quarter selling approximately 1,165 trucks year-to-date. Given our prior guidance to sell 800-1,000 for the year, I believe it's safe for you to assume that we will exceed our targets for the full year. That concludes my remarks, so I'll turn it over to Brad Hicks. Thank you, Nick, and good afternoon. My comments today will focus on the performance of our Highway Services business during the quarter, which includes both Integrated Capacity Solutions, or ICS, and Truck or JBT. Let me start off by saying how excited I am to see our team respond to the opportunities our customers present us with to deliver both Truck and trailing capacity solutions to serve their needs. These capacity solutions were enabled by our multimodal digital freight platform, J.B. Hunt 360, and complemented by our drop trailer pools with 360box. Additionally, these capacity solutions across Highway Services continues to provide value for our customers, as evidenced by this most recent performance being the third quarter in a row in which both ICS and JBT delivered the strongest growth within our organization. This continues to support our decisions to focus our investments on our people and technology, which is driving further scale across the platform and our organization. I'll start with my comments on JBT or our Truck segment. Revenue grew 70% to $184 million. This is the highest revenue this segment has delivered since the Q2 2008. Operating income was $14 million, which was the highest Q2 level achieved by the segment since 2007. Our growth and performance continues to be driven by our ability to provide capacity solutions with or without our physical trucking assets, but with our trailing assets. Our ability to solve for the most efficient way a load should move by finding the right carrier at the right time and at the right price is what continues to drive strong demand for our 360box product. More importantly, our ability to access capacity quickly has allowed us to be able to tell our customers yes. As we have discussed in prior calls, we continue to see the business shifting to a more asset-light model and will remain focused on investing and scaling our service offering while staying focused on generating adequate returns on our investment. This will require a focus on balancing our growth with network efficiencies as we scale in the future. Next on ICS. The segment delivered $608 million of revenue, which broke our previous record set in the fourth quarter just last year. Revenue grew 100% versus the prior year period. Segment volumes grew 20% within the quarter, while specifically truckload volume growth was up 30%. Market dynamics remain challenged as freight demand strengthened from already elevated levels while capacity remained constrained across the country. The result of which put seasonal pressure on net revenue margins, which was consistent with our expectations. We continue to see solid trends with our carrier and shipper engagement on the 360 platform and remain encouraged by the productivity we are seeing with our people, all of which is enabled by our investments in both our people and technology. We continue to see opportunities to invest in our three critical areas, our people, our technology, and scaling the platform, and remain committed to these investments. In closing, our performance this quarter on ICS and JBT align with one of our key objectives, which is to grow volume and gain market share by leveraging our platform and using data to help our customers make the best decisions and deliver value to their supply chains. We do this by eliminating waste in the system and creating a frictionless way to access vast amounts of capacity across a multimodal digital freight platform. We remain excited about our opportunity to deliver our capacity solutions to our customers across our Highway Services businesses well into the future. That concludes my comments, I'll pass it over to Darren. Thank you, Brad, and good afternoon everyone listening to today's call. My comments this afternoon will focus on Intermodal's performance during the quarter. I will also provide some additional details on network operations, including the onboarding of new containers and how we are working to improve velocity and in turn, capacity in our network for and on behalf of our customers as we approach peak season. Demand for our intermodal capacity remains robust. In fact, demand continues to significantly outpace our available capacity, which remains constrained by rail performance and restrictions in addition to customer detention of our trailing equipment. We continue to believe that the origin of these challenges center on the availability of labor for both the railroads, particularly in their terminals, and our customers in their warehouse operations. Volumes in the quarter increased 6%, broken down by month as plus 17% in April, plus 8% in May, and minus 6% in June. As we discussed a year ago, June 2020 was a particularly strong month for us as we had equipment properly positioned for the surge in demand as the activity across the supply chain restarted. Network velocity continues to be well below our expectations, as evidenced by our box turns, which were approximately 1.65 turns per month during the quarter. We are working very closely with our rail providers and customers to improve our capacity across the network by focusing on reducing the detention of equipment and helping our rail providers reduce congestion across their terminal infrastructure. Going forward, the onboarding of our new equipment will also assist us in serving our customers' capacity needs, particularly as we approach peak season. On that front, we began taking delivery of our new equipment in the last few weeks and have even more on the water as we speak. We expect a steady flow of equipment into the West Coast at this point moving forward, which is now likely to stretch into early 2022. At this time, we are through the majority of repricing efforts for this latest bid season, and rates came in at the higher end of our earlier expectation, which our original expectations were for high single-digit to low double-digit increases. By the end of the quarter, about 70% of the volume had current bid cycle rates, and we expect the remaining 30% of the business yet to reprice to implement in Q3. Inflationary cost pressures continue to present themselves in the way of driver wages and recruitment costs, in addition to the cost of equipment ownership, particularly as utilization levels remain challenged by both the rail and customer activity previously discussed. We believe we have put in place the right pricing structure and programs that protect our necessity to generate an adequate return on our significant investment in our people and our equipment, even if box turns remain challenged due to events outside of our control. As we approach peak season, it is clear that our customers continue to want to lean into us for more capacity, and we feel very confident in our ability to execute our plan. Customers value our intermodal service offering as it continues to be a very cost-effective alternative to truck, and even more so now due to rapidly rising driver wages and fuel prices, but also because of the environmental benefits of intermodal as its carbon intensity is 60% lower than the truck alternative. Going forward, we will continue to prioritize delivering value to our customers, generating appropriate returns in our business, reinvesting to meet their future capacity needs, and keeping us on a path toward long-term sustainable growth. That concludes my prepared comments. Hey, Mika, just if you don't mind, this is Brad. A word to the audience. We're going to do one question again like we did last quarter. Mika, we'll turn it over to you to open the call for questions. All right. As a reminder, to ask a question, you will need to press star one on your telephone. To withdraw your question, press the pound or hash key. Your first question comes from the line of Allison Landry from Credit Suisse. Your line is now open. Thanks. Good afternoon. Just wanted to ask about intermodal. You mentioned that the customer detention for equipment is at all time highs in the second quarter. Presumably, you're charging accessorial. Hoping you could quantify this for us in the quarter relative to what it was in Q1 or sort of a normalized run rate. Allison, we've been talking to our customer base about the impact it's had on our capacity for really several months and even into the fourth quarter of last year, we've really been highlighting this challenge. I don't know that we had significant changes in the revenue cycle during the quarter, as we've always talked about that. I think that what we've been doing more recently with our customer base is trying to highlight and incentivize faster unloading, that was probably towards the end of the second quarter. Beyond that, I probably don't know how to highlight the impact of that during the second quarter. Okay. I guess what I'm sort of getting at, do you think that there was a positive margin benefit that you experienced in Q2 as a result of this that we shouldn't be modeling in going forward? Yeah, I just don't think we can break out accessorial conversation as it relates to the margin. No, I wouldn't say that there was anything material in the quarter related to that. Okay. Thank you. Your next question comes from the line of Ravi Shanker from Morgan Stanley. Your line is now open. Thanks. Good afternoon, everyone. Just on ICS, can you help us understand the gross margin path forward? Clearly, you guys have done well to kind of keep the offering kind of black there. A, what percentage of your book has been repriced? B, kind of assuming spot rates don't collapse from here, are we looking at the current trajectory of gross margin for the back half of the year? Thanks. Sure. Just to start, and I think Shelley Simpson might join with a comment or two, we definitely anticipated that seasonal margin pressure. We highlighted that in our Q1 call, we were not surprised by the second quarter performance with respect to where we landed. I think that historically, the second quarter is always the more pressured gross margin quarter that we experience. We would anticipate seeing lift as we move into Q3 and Q4 away from that based on historical norms. Shelley, on the bid data? Yeah. From a bid season perspective, we're slightly behind in ICS from where we are in JBI of what is implemented. JBI is further along. I think that's because of the volatility that's happening in the brokerage market in general. Just under 60% has been implemented. I would also say that our revenue per load changed inside ICS as a result of moving more business in near term to contract versus contract with carriers. That business and a higher revenue per load did yield a lower gross margin percentage, but our gross margin dollars per load was still up. It's a little bit apples and oranges compared to what we have historically done, just because the revenue per load has changed so dramatically. Thank you. Your next question comes from the line of Justin Long from Stephens. Your line is now open. Thanks. Good afternoon. I wanted to ask about your ability to ramp intermodal volumes sequentially in the second half. Shelley, you mentioned a few of the key drivers in the prepared remarks. Is there any color you can give on the number of intermodal containers you expect to be delivered in the second half? Any thoughts around the sequential progression of box turns as we think about your capacity to grow beyond the 500,000 loads in the second quarter? Okay, Justin. I think the key to this is certainly customer demand has been very strong, and velocity has been the bottleneck. We highlighted that we have new containers on the water today. We have strong confidence in our ability to receive between 3,000 and 4,000 during the third quarter. We also highlighted that we feel like of the 12,000 we announced at the first quarter earnings call, some of those will certainly filter into the early stages of 2022. The team is working every day to continue to receive more containers as we move into the fourth quarter. For now, we can highlight 3,000 to 4,000 in Q3. I think that on the velocity front, we're working with customers to find ways to free up the equipment faster. That's certainly an ongoing effort. The railroads, the key there is getting faster velocity out of the rail system, and we're aligned with all of our rail providers on their mission to improve their velocity. That is an expectation of ours during the quarter. If you're asking for specifics, we highlighted 1.65 turns in the second quarter. We think that can improve somewhat to slightly in the third quarter, but I'm not yet ready to believe it's going to be a real material impact at this stage. Okay, great. Very helpful. Thank you, Darren. Your next question comes from the line of Amit Mehrotra from Deutsche Bank. Your line is now open. Thanks so much. Hi, everyone. Darren, another intermodal question. We've obviously had some updates from the rails. Union Pacific shut down eastbound movements to their Global IV terminal. I think BN has also started to meter space on its own intermodal trains at least through the end of this month. Can you just help us think about what the volume impact is? A little bit similar to the last question in terms of what the headwind this may be as you move from the second quarter to the third quarter. You've been really helpful in the past about talking about maybe the margin progression expectations, and you've been bang on in terms of sequential margin improvement as the pricing further gets implemented. You guys have shown good drop through in the intermodal on the incremental revenue growth, at least sequentially, as some of the pricing comes through. Should that just be a continuation into the third quarter as that 30% gets repriced? What's the right expectation around margins? If you can just answer those two questions. Thank you very much. Hey, Amit. This is Brad. I'll take the first part of that. I think Darren did a really good job of giving a lot of details on expectations for box turns and containers, and clearly, you know where demand is. I don't think we need to address anything more in terms of expectations for volume. I'll let Darren provide comments on the rail service and maybe the UP stuff. I just wanted to get that point across. Darren. Sure. Amit, appreciate the questions. The thing on the restrictions that you've heard from UP is Well, we don't operate on Union Pacific, it's largely understood to be international only, there's not a lot of impact to us on domestic volumes. BNSF and J.B. Hunt are working really well together every day in an effort to expand our capacity and improve velocity. Everything we can do to create fluidity at the terminals in order to help provide that, we're doing that and working with our customers on scheduling. We're draining loads out of the terminals. We're doing a tremendous amount of work in order to improve fluidity. When you're hearing some of that restriction information, sometimes it's more international focused than it is domestic. We have some energy from that as I think the international supply chain has been one of the more significant drags on productivity for the various rail terminals. Certainly, if they can be focused on eliminating some of the congestion from international in order to free up capacity for domestic, we would certainly stand to have some benefit from that. I'm not saying that's what they're doing, but certainly the announcement from UP was focused on international only. The margin progression? The margin. I think we said that on the last call, we restated our long-term margin target of 10%-12%. We said we thought we would make some improvement as 2021 went on and as we implemented prices. That continues to be true. We're inside that range and feel good moving forward that we will stay inside that range. Got it. Thank you very much. Your next question comes from the line of Scott Group from Wolfe Research. Your line is now open. Hey, thanks. Afternoon, guys. It sounds like you don't want another volume question. I have one because I'm not so clear. I guess I'll just ask it directly. Do you think you can grow volumes year-over-year in the third quarter? Just to follow up on the margin side, as these accessorials kick in some more and you get the full impact of pricing, do you think that there's potential to get towards the upper end of that margin guidance towards the back half of the year? Thanks, Scott. This will be Brad again. I think Shelley, in her prepared marks, talked about volume will be influenced by three main factors, rail fluidity, detention at customer locations, as well as the onboarding of our new containers. Some of those are out of our control. We talked to you, and Darren gave you specific guidance on what we think containers will do in the quarter. Other than that, it's going to be hard to give you anything more specific than what we have. I'll just respond to that part of the question, and then to your second part, I'll turn it over to Darren. I'm going to need a quick refresh on the second part. Scott, refresh us on the second part of your question. Yeah, it was just about as we get the full impact of the pricing and the accessorials, is there potential to get to the upper end of that margin range? Maybe just to clarify the first part of that volume question. Darren, you mentioned June a year ago was a month where you had the boxes in the right place. Was that the same scenario? Did you have the boxes in the right place in the third quarter last year? I just don't really remember. Well, I'll just hit on that real quick, and then we'll hopefully move on from the volume stuff. We depleted our stored containers during June of 2020, which largely created a lot of very fast fluidity for us because we had gone into storage during the really weakened part of the second quarter last year. During the third quarter, demand was so strong, no, we didn't have equipment really positioned strongly. That was back to the need to really reposition the equipment, which drove a lot of the velocity challenges that we certainly had a year ago. On the margin front, it's a range because a lot of factors influence that. Certainly, can we achieve it? It really depends on some of the cost challenges. At this point, there's no letup on challenges for recruiting and hiring and retaining drivers. There's no letup on the cost to outsource capacity, our need to secure capacity in order to drain loads out of the terminal. All of those cost challenges are real. We just got to say that it's going to be within the range, and I think that's really all I could comment on the margin. Hey, Scott, if I could add to that. We are working at a very tactical level with our customers on a regular basis. Probably the most detailed plans that I have seen us work with our customers to try to avoid those charges. We're doing a lot on the front end to try to identify where the bottlenecks are. Our intent is to move more volume. We do have to have those three things come in line, but we really haven't thought about it. Our accessorials are not there for us to gain incremental or even more margin dollars to our bottom line. Our accessorials are there so that if we can't anticipate what's happening as those containers and 360box boxes are dwelling, that we can be properly rewarded for that box sitting. Makes sense. Thank you, guys. Appreciate it. Your next question comes from the line of Chris Wetherbee from Citi. Your line is now open. Yeah. Hey, thanks. Afternoon. Maybe a question on DCS, if I could? If you could just give us a little bit of sense of maybe how the pace of new fleet acquisitions will go in the back half of the year, and maybe sort of contrast that with how we should expect startup costs to kind of ramp. Obviously, it was a bit of a heavy quarter this quarter. Curious if that persists in 3Q and into 4Q, or do you see it decelerate a little bit? All right. Well, based on our pipeline, we think that, well, you saw Q2 was very strong. We think Q3 will be strong as well. It's hard to tell on Q4. We got to make sure we got equipment. We got to make sure we got drivers. There are just a lot of unknowns that far out. I will say that the pipeline is full, but there's a lot of things that go into metering how fast we can start those up, drivers, equipment, and even some on the management side. I would say Q3 is looking very strong as well. Your next question comes from the line of Ken Hoexter from Bank of America. Your line is now open. Great. Good evening. Great job in keeping rates ahead of costs. Nick talked a little bit about the hardest hiring environment in 37 years, Nick and Brad, I think everybody highlighted the labor pressures to keep fluidity. John, maybe step back and give a little bit of your thoughts on labor. When you think about hearing impacts of embargoes on some of the networks, are any concern that the network starts to melt down like we've seen on some of the rail networks when it starts spreading and spreading out wider from just one area, especially when you're adding capacity when the rail network's not fluid. Is there a concern that it gets gummed up and they're not able to take advantage of their Precision Scheduled Railroading overhauls? Yeah, Ken, let me have Darren respond to that. I think he'll have a better look at it. Okay. Is there a concern of a meltdown? I think that the railroads have all shown a fairly quick step in to slow volume down if heading towards that kind of a challenge. 2021 has been certainly an unusual year. No, I don't expect any kind of meltdown from the railroads. I do think that when we talk about labor challenges with the rail system, I really do think we're talking about locations that need to find 4% or 5% more employees in order to be fully staffed and overcome kind of a challenge that they're in now. These aren't just massive amounts of people that they need to hire. It feels like that would be highly unusual, and I think all of the railroads are very focused on these challenges, and they're out addressing them, and I don't feel like that some sort of a significant meltdown is a very significant risk at this point. All right. Next question comes from the line of Tom Wadewitz from UBS. Yeah. Good afternoon. Well, I guess a related question. It seems like labor is such an important topic. I wanted to get your thoughts on how you look at labor intensity of your model. I tend to think intermodal is obviously less driver intensive than truck, so you would have some advantage versus truck in a tight labor market. Just wanted to see if you could offer some thoughts about, does this tight labor market provide advantage to J.B. Hunt in a certain way? If you could also just say, have you seen any signs of improvement? I think we've got, I don't know if it's 25 or 26 states that I think have started to ease up on the payment of the bonus unemployment. Is that improving or is there kind of no light at the end of the tunnel in terms of labor availability? Thank you. I would just say from a labor standpoint, I would say, as I said in my comments, very tight. I think we do a very good job of responding to that. Our model is pretty agile, very site specific on how we can address individual labor concerns, whether it's in some of our fulfillment warehouses, final mile, or whether it's intermodal rail ramps specifically. I think we have a very solid approach. We got a very robust corporate driver personnel team that helps us in the labor market. It's challenging. I would just say the other side of it is we have very good, as Shelley alluded to, relationships with our customer. We're very open. We try to stay ahead of that, show them metrics in those areas, and try to get ahead of that with them. I think it's an advantage to us, personally, in the tight market. Does that mean we don't have pain? No. We have pain, but probably not as much as others. On your question about unemployment, it's too early to say. We've been having some conversations about can we measure in the states that have rolled back the unemployment benefits, have we been able to recruit more there? It's too early for us to tell. I think by the end of Q3, we'll have a better feel for that. I know at the end of September, supposedly the rest of the country will roll back on that. I think it'll just kind of become very clear at that time. It's too early right now to tell. Most of that's in the South, and if I was going to say any area was a little less pressured than the other, it would be in the South, a little less pressured. They're all pressured, but a little less pressure there in general. I would just add to that, Nick, on your first part of your question, you used the term where we have good agility, and I think that's very well represented in the pivot that we've made in our strategy in JBT, moving more towards an asset light, and I think that's facilitated the growth that we've experienced over the last several quarters that we've been talking about records since 2007 and 2008, by going to that asset light model and tapping into the carrier base that we've had access to via ICS. 360 platform has certainly enabled us to be more flexible for our customers and be able to do more for them in that environment is just another good example of that. I might just finally add, one of the things with our customers, we certainly talk to them about where our pain points are at, but it is much easier today for us to say yes and to make a pickup on behalf of a customer. It really comes down to cost. When we take our more than 20,000 drivers and extend that to our platform, reaching nearly 1 million trucks, our ability to source on behalf of our customers is significantly different than what it would have been maybe in the last cycle. We can always say yes, it's just down to cost and what that means from a pressure perspective, helping us meet with our customers and helping make sure that their budgets are intact. Next question comes from the line of Brian Ossenbeck from JP Morgan. Your line is now open. Hi, good evening. Thanks for taking the question. I just wanted to ask one about ICS and 360 in particular. I saw the employee count was up a little bit at the end of the period from the first quarter, but the average number of loads per employee was still pretty good, moving favorably. I wonder if you could talk about just productivity on the platform and then here in the near term, maybe through the rest of the year, and then just give us an update in terms of the roadmap, the investments going forward here across the different metrics you usually look at in terms of people, technology, and scale. It seems like you've made progress and all that, also seems like you've got some more investments to be had. Maybe you can give us an update on productivity and where you see the investments going next for 360. Thank you. Yeah, thanks, Brian. A lot inside of that question. Yeah, we're definitely satisfied with the progress that we've made. Appreciate you gravitating towards our three critical areas of our people, our technology, and scale. I think that that has been demonstrated over the last several quarters. As we continue to grow on the scale, we've gotten back to profitability, which we've talked about for the last eight quarters, that investment window. Investments will continue on. Obviously, with the work that we're doing with Google and the co-innovation that will come from that will allow us to make good decisions around how we continue to invest to enhance the 360 platform and how we can make sure that we're providing value for our customers and for carriers. I think it's clear that our goals are to create the most efficient transportation network in North America, and we feel real good about where we sit with respect to that. I would say that the things that are most important to our customer is really cost, service, and capacity. Our investments continue to focus around visibility, transparency, and access. That's where we'll continue to make decisions in how we move forward. Shelley Simpson, I don't know if you want to add anything. Yeah. I might just add that as we're looking at our five-year modeling that we put in place when we very first rolled out 360, we have made good improvements across the board. We still do see, I mentioned this I believe at the end of last year, that we did have some internal work happening in 360 with our internal systems called Match that will help us connect our people with what's happening in the marketplace. Really allowing us to use that frictionless digital platform externally and connecting that with people when we really need to be problem solvers on behalf of our customers and our carriers. We've made improvements there. We do still have improvements left that need to occur in our five-year modeling. Certainly in the scaling piece, our gross margins as a percentage, those numbers, we still believe that we will continue to find the right truck at the right time at the right price that will allow us to continue to expand margins inside that overall. Your next question comes from the line of Jordan Alliger from Goldman Sachs. Yeah, hi. I was wondering if you could talk a little bit to Final Mile profitability. I think the long-term target range is 4%-8%. You've kind of been in there the first half. With probably what's going to be a strong peak and the various cost pressures, do you think we could stay sort of within the general targeted range through the balance of the year? Thanks. Yeah. I'd say we're clearly moving in that direction. There's a lot of things going on. One, there's a lot of cost pressure that you alluded to inside the warehouse, the loading of our box trucks, second seat on even our contractors. Contractors' labor rates are going up, so we're facing some headwinds there. The other part of it is just the supply chain. We're at the very end of the supply chain, so we got to make sure that the product is there. The furniture industry, if you look at that, there's a lot of long lead times. Chips are affecting a lot of the appliance folks. There's just a lot of things going on in that. Our plan is to stay in that target range. There's a lot of headwinds towards it, so it's hard to clearly say right now. Your next question comes from the line of David Zazula from Barclays. Your line is now open. Hey, thanks for taking my question. Maybe another one for Brad on Final Mile Services. You mentioned the revenue per stop is down due to a shift between the asset base and asset-light segments of that segment. I wonder if you could just comment on whether that's just kind of the normal course of business or whether that's an intentional shift towards a more asset-light model within Final Mile Services? We're very agnostic with our customers. We present both pricings. It just depends on which customer's buying at the time. Right now, it seems to be the non-asset was what was being bought recently. I would just tell you two deals on the asset side right now. It moves around. What I see in the pipeline, I would say, is more on the non-asset side for the most part. There's still an asset play that moves in there every once in a while. It moves around. It's hard to predict. We're pricing all of them. We just adjust our ROIC based on the amount of capital we have to put in there. The pipeline, I would say, is more on the non-asset side right now. Your next question comes from the line of Todd Fowler from KeyBanc. Your line is now open. Great. Thank you. Brad Delco, can I ask what intermodal volumes were yesterday? Is that okay? Offer your next question, please. I'm just kidding, Todd. Go ahead. No, you're partially kidding. I understand. I'm kidding as well. Oh, yes, actually. That's right. Partially kidding. What I did want to ask about is, there's a lot of anticipation and a lot of hype around this peak season. Maybe partially for Shelley and maybe partially for John Kuhlow, as we think about peak planning, would the expectation be that this is more of an elongated peak and are customers going to start to pull forward activity earlier than what we typically see? How do we think about the seasonality of either EBIT or the earnings cadence in the second half of the year? Should that follow the change in customer shipping habits, or is it just a situation where we're going to be at this elevated level for a longer period of time just where the demand environment is? Thank you. Thank you, Todd. I'll take the customer side, and then I'll turn it over to John on the last part of the question. The disruption that occurred in 2020 has continued all the way through today, and we believe will continue through the rest of this year and into next year. Our customers do have a displacement happening from an inventory perspective, and we have heard our customers say they've moved from ordering from a need-by date to a when-can-you-get-it-to-me date. There is inventory in the supply chain today that has already been delivered that typically would not be there. There has been some pull forward. I think it's just been based on a lot of the disruption that's happened, particularly in the global supply chain. That has caused the upstream issues that are now hitting in the U.S. as well. Certainly we know the problems that are occurring across every part of the supply chain in delivering goods for our customers. I would say our customers, from a demand perspective, believe that the rest of this year will be strong into next year as well. Finally, I would say peak season, we are doing a ton of peak planning. I talked about that on the last earnings call. We are doing that again now, and we're really doing that comprehensively across all of our five segments. How can we help understand the needs of our customers, what that will look like, and then what will we do when more disruption occurs in locations that are outside of what we are focusing on from a peak perspective? The sooner we can do that, the more success we'll have together with our customers. Todd, I apologize, but I probably have to shoot down your second question. Don't really know how I can answer that without giving you guidance on our margins for the second half. What I will say is that, as Shelley mentioned, we're doing everything we can to talk with our customers and understand what their demands are. We're trying to get as many resources as possible, both people and assets, with the equipment orders that we have put in place to try and be in the best position to address those needs and, as Darren mentioned, working with the rails to see what we can do to try to alleviate some of this congestion. We've given margin target guidance ranges, and that's really all the further I can add to that. Your next question comes from the line of David Vernon from Bernstein. Hey, guys. Thanks for taking the time. Question for you on longer term CapEx. I'm just wondering, as you look across demand for equipment into this year and into next year, should we be expecting a multi-year level of elevated CapEx? Do you feel like we should be seeing the recovery in rail service and box turns that would allow you to deliver with a little bit less than we're spending in fiscal 2021? Well, I'll provide just some comments on consolidated CapEx and what we're looking at. As we mentioned, some of the orders that we have placed, some of those are going to push into 2022. We haven't changed those orders, that will move. I would expect that our 2022 CapEx is going to be elevated as well. We're still trying to understand what the replacement and growth needs are. Frankly, we have reduced some of our trade-ins this year on tractors just to continue to maintain the available capacity, we'll probably have a higher CapEx in 2022 with that as well. Right now, I would say that our 2022 CapEx is going to be not as high as 2021, but will be elevated over what we've seen historically. Your last question comes from the line, Jeff Kauffman from Vertical Research Partners. Your lines are open. Thank you very much. Thank you for taking my question. Shelley Simpson, you had mentioned earlier about how customer inventories were as tight as you've seen them. Is there any way we can put that into perspective, either with anecdotes or just to give us an idea of where inventory levels are at customer X or customer Y relative to where they should be? Well, I can't speak specific at the customer level. Obviously, I have some of those anecdotal stories, but I think it's what I said earlier, which is they don't have the inventory exactly where they want it or at the timing that they want it either. I think there are concerns about this Christmas season, and will they have all of the necessary inventory on shelf or available through e-commerce channels? That's a concern of our customers. Inventory will take some time to catch up just to more normal levels. There are several stories from our customers, whether it's Christmas product already here in stock ahead of schedule or concern that their peak shipments that are supposed to be on the water aren't on the water yet. There's a lot of concern coming here into the back half of this year. Okay, Mika, thank you. This is Brad. I just want to thank everybody for their questions. Obviously, we'll be in touch with you guys in three months, and if you have anything before then, feel free to reach out. My email address and phone number is on our earnings release. Thank you for your time. This concludes today's conference call. Thank you for participating. You may now disconnect.