Good afternoon, everyone. Thank you for attending today's J.B. Hunt's 1Q 2023 earnings conference call. My name is Sierra. I will be your moderator today. All lines will be muted during the presentation portion of the call, with an opportunity for questions- and- answers at the end. If you would like to ask a question, press Star one on your telephone keypad. I would now like to pass the conference over to our host, Brad Delco, Senior Vice President of Finance with J.B. Hunt. Please proceed. 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 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, Mr. John Roberts, our President, Shelley Simpson, our CFO, John Kuhlow, Nick Hobbs, COO and President of Contract Services, Darren Field, President of Intermodal, and Brad Hicks, EVP of People and President of Highway Services. At this time, I'd like to turn the call to our CEO, Mr. John Roberts, for some opening comments. John? Thank you, Brad. Good afternoon. I'll touch on a few items, but we'll be brief with my comments as we have members of our leadership team here to cover specific areas of our business. As we have discussed shifting dynamics in the market for several quarters now, it should be evident that freight demand is muted even when taking into account seasonal factors. As I stated last quarter, I believe this environment presents both opportunities and challenges for our company that will ultimately put us in a better position in the future. I am seeing firsthand how this team, and might I add this experienced team, is responding to set our company up for long-term success and compounding growth as we navigate through these demand patterns. We remain thoughtful in our approach to managing the business and controlling costs where it makes sense without sacrificing our preparedness to capitalize on large, meaningful, and addressable opportunities for the company. We have and will always manage this business with a focus on long-term growth built on our company foundations: people, technology, and capacity. In closing, I remain confident that the collective and complementary nature of our distinct business will again prove resilient in this environment. Coupled with experience, a strong balance sheet and a long-term mindset, key elements which will continue to differentiate us in the market. We remain committed to investments and achieving our required return on those investments to support our long-term sustainable growth for the benefit of all our stakeholders. Now I'd like to turn the call over to our President, Shelley Simpson, for more details. Shelley? Thank you, John, and good afternoon. I thought it made sense to talk about where we are as an organization and what we are working on to set us up for long-term success. More importantly, how this aligns with our 2023 priorities that I previously shared, which are to, one, remain committed to discipline long-term investments in our people, technology, and capacity. Two, deliver exceptional value to our customers. three, drive long-term compounding returns for our shareholders. To start, we're in a challenging freight environment where there is deflationary price pressure for an industry that continues to face inflationary cost pressures. Simply stated, we're in a freight recession. As we have discussed, we believe we are in a position to deliver exceptional value for our customers by leveraging our full suite of services to deliver maximum efficiency and eliminate waste in the supply chain. We can do this by providing cost savings opportunities by converting on-highway freight to intermodal, designing a highly engineered and efficient solution in our dedicated segment, leveraging vast amounts of market competitive capacity sourced on J.B. Hunt 360, or by providing best-in-class service as one of the largest final mile providers in North America. The strength and resiliency of our organization is supported by our mode-neutral approach across all of our businesses and backed by our company foundations, which are our people, technology, and capacity. That's where we are today. What are we working on? As we've committed to discipline long-term investments in our people, technology, and capacity, we admittedly have too much cost in our system right now for the current level of activity in our organization. While we want to prudently manage our business in the near- term by focusing on controllable costs, more importantly, we remain focused on our long-term strategy to compound our growth at acceptable returns. As an organization, we have put greater emphasis in areas of our business by reallocating resources that will set us up to accelerate our growth and performance coming out of this current environment. One area in particular that has immense focus is in the area of safety. As you might have noticed in our release, we moved pieces of our JBT and ICS segments into DCS and FMS segments respectively to best position the organization longer- term. While none of our businesses are immune to this environment, I am confident that there are great things happening in our business that set us up for long-term success. Remaining committed to our disciplined investment while prudently managing our cost is an area of focus for us across our organization. In closing, I want to say we remain cautious on the outlook for the year. We remain confident in our ability to deliver value for our customers that will enable us to grow and take share through cycles while maintaining discipline on our returns on capital. As I have stated previously, we will remain focused on the things we can control. We remain committed to managing our business for the long- term. As I look across our organization and see the experience and tenure of our team as a result of the investments made throughout our careers, I am confident in our ability to deliver long-term, sustainable returns for our shareholders. With that, I'd like to turn the call over to our CFO, John Kuhlow. John? Thank you, Shelley. Good afternoon, everyone. I want to touch on three topics with my prepared remarks, including a quick review of the quarter, some details on our capital plan for 2023, and bring to your attention some small changes we made in our segment reporting. First, on the quarter's results. As previously discussed, overall demand for freight capacity has moderated versus the prior year period as evidenced in our results. On a consolidated GAAP basis, revenue for the quarter declined 7% year-over-year. Operating income declined 17% and diluted earnings per share decreased 18%. These declines were primarily driven by lower freight volumes, moderating pricing trends, and inflationary cost pressures, particularly in the areas of salaries and wages, insurance and claims, and parts and maintenance-related expenses. Our balance sheet remains strong with ample liquidity available to support our investments to drive long-term value for our shareholders. Regarding those investments, our capital plan still contemplates between $1.5 billion and $2 billion of investment in 2023. To provide some greater detail, we expect about $400 million-$500 million for real estate, which will support our long-term growth plans for the company. The majority of the balance is almost evenly split between our tractor and trailing capacity needs. Keep in mind, trailing capacity includes both dry and temperature-controlled trailers and containers, as well as chassis. The growth in our Intermodal and dedicated fleets the past two years, coupled with the lack of availability of new equipment as OEM supply chains were constrained, required us to hold our equipment longer. Accordingly, a large portion of our 2023 tractor capital is for replacement needs. We did repurchase some shares in the quarter and remain committed to be active in the market as opportunities arise. Finally, we moved the majority of our J.B. Hunt-owned tractors out of our JBT segment into DCS. These trucks have consistently operated in a dedicated-like manner for customers over many years and makes more strategic sense to be managed out of our DCS segment, while also allowing JBT to focus its efforts on scaling our J.B. Hunt 360box service offering. Second, we moved our non-asset LTL business out of ICS and into Final Mile, which has similar operating characteristics as our Final Mile business. These realignments best position our organization for our future and focuses each segment's people and assets in particular areas of expertise. We have included an addendum in our earnings release to provide a historical perspective for these moves. This concludes my remarks, and I'll now turn it over to Nick. Thanks, John, good afternoon. I'll provide some comments on our Dedicated Contract Services and Final Mile segments and also give an update on areas of focus across our operations. I'll start with Dedicated. While demand for our professional outsourced Private Fleet Solutions remains strong, we have seen some moderation in our pipeline of opportunities. That said, we sold approximately 200 trucks of new business in the first quarter and remain optimistic about hitting our target for the year. Our net truck adds in the quarter increased 426, but included trucks transferred from JBT. Excluding this, our net truck count increased 28 units in the first quarter. Similar to last quarter, this number was influenced by the cleaning up of extra trucks held due to the age of our fleet and also partly driven by our CVD, or customer value delivery process. This process optimizes fleets to manage costs for our customers as demand levels in their business change. This supports our 98% retention and our future growth opportunities. To a lesser extent, we did see some account closures in the quarter. Overall, we continue to carry momentum from our success over the last year, which drove revenue and operating income growth of 13% and 29% respectively in the quarter. Now on to Final Mile. As we discussed last quarter, demand for big and bulky products, including appliances, furniture, and exercise equipment, is soft, but this hasn't deterred us from our commitment to improving profitability in this segment. Our efforts are focused on ensuring we are getting appropriately compensated for our high-quality, differentiated service product in the market. We continue to put business at risk during this renewal processes, and at this point, we remain pleased with our ability to retain business. This is, in my opinion, a testament to our service. Encouragingly, we are seeing some activity in the pipeline, but overall demand remains tempered in the segment. I'll close with some comments on safety. We continue to make significant investments in our training and new technologies to improve safety performance in our operations. As a result, we recently announced the rollout of inward-facing cameras across our fleet to help address the distracted driving and other coachable activities with our driving workforce. This is a big step for our organization, follows similar bold moves in our history to lead in the area of safety, including in 1996, increasing our pay package to attract experienced drivers, which resulted in a 50% reduction in DOT preventable accidents. In 2006, supplementing the DOT urine drug test with hair testing, which resulted in an 87% decrease in DOT post-accident positive rates. In 2011, rolling out forward collision warning systems, which delivered nearly a 50% reduction in rear-end accident frequency. In 2016, rolling out forward-facing cameras, which drove an 18% reduction in collision frequency per million miles. I am proud of our company's commitment to the safety of our employees and the motoring public. That concludes my remarks, so I'll turn it over to Darren. Thank you, Nick, thanks everyone for joining us. I'll review the performance of our intermodal business in the quarter and reiterate the opportunities we have to deliver significant value to our customers with the investments we are making in our people, technology and capacity. I'll start by reviewing Intermodal's performance in the quarter. Demand for intermodal capacity was tempered, driven by overall freight activity, but specifically lower imports and elevated inventory levels across the supply chain. Volumes in the quarter declined 5% year-over-year, and by month were down 2% in January, down 4% in February, and down 8% in March. As we stated in our earnings release, transcontinental volumes were down 9% in the quarter, but our eastern volumes were up 1%. I think this is an important call-out as we have been growing volumes in the east, which is the most truck competitive market while being in a depressed truckload environment. This mix shift to shorter length of haul freight does influence contribution dollars per load, which did impact us in the quarter, but also should signal our ability to deliver value to our customers in this market. Rail service predictability and consistency has improved to near pre-pandemic levels, while customer detention of equipment improved even further and as the quarter progressed. While we have seen a decline in revenue associated with the detention of equipment, we have not yet offset that impact with the onboarding of new volume. As I've stated recently, our Network and Service offering is a coiled spring that can handle significantly greater volume today and unlock a lot of value for our customers and our company. We have the people, the dray capacity, and the containers that could handle upwards of 15%-20% more volume today. As we have shared recently, we have been meeting with customers and continue to be encouraged by the feedback we are receiving about our service. Customers trust us and our Say-Do culture. They believe in our intermodal product and they want more of it. Part of that is influenced by the economy and overall freight demand. We feel very confident that we have a differentiated product in the market that will support our ability to take share. We are encouraged by the results we are getting so far in the bid process and look forward to the opportunity to prove the value we can deliver to our customers. In closing, we strongly believe in the strength of our Intermodal franchise and its opportunities to drive significant growth over many years. It provides significant value for our customers with opportunities to save money by converting freight from the highway to Intermodal, which reduces costs and is further supported by fuel costs and carbon emission savings. We are in the best position to commit more intermodal capacity to our customers as we progress further through the current bid season, which should present meaningful opportunities to unlock value in our network for the benefit of all of our stakeholders. That concludes my prepared remarks, so I'll turn it over to Brad Hicks. Thank you, Darren, and good afternoon. I'll review the performance of our integrated capacity solutions and Truckload segments, what we collectively call Highway Services. I will also provide an update on J.B. Hunt 360°. Before we begin, as mentioned in our release, we carved out our LTL operations from ICS, which are now included in Final Mile. We also carved out most of the operations of our company-owned trucks from JBT, which are now included in DCS results. I will speak to our results on a reported basis with the adjustment to our prior periods. Regarding this shift, we believe this better aligns the management of these particular businesses and allows Highway to focus our efforts on leveraging our J.B. Hunt 360° platform to source third-party capacity for the movement of full truckload freight. Turning to the business, I'll start off with ICS. Top line revenue was down 42%, driven largely by a 25% decline in volume. The truckload market continues to see significant pressure on both volume and price. We are certainly seeing that, particularly in the spot market, as our contractual truckload volumes were up in the quarter. Touching on our volume performance, we are not immune to the market, but we are also not meeting our expectations. That said, I want to remind you of the work ICS, powered by J.B. Hunt 360°, handled a year ago to help meet the needs of our intermodal and dedicated customers as congestion and equipment delays tempered our ability to serve their needs. ICS was able to step in and cover freight, which is a testament to the power of our scale and our mode-neutral approach. As we stand here today, we are clearly facing tougher comps as a result of that dynamic. Now moving to Truckload. Similar to my message last quarter, we continue to see demand for drop trailing capacity holding up better than the market, although we are not fully immune from the market dynamics. Our 360box volumes were up double digits in the quarter as customers continue to like the flexibility of blending their live and drop trailer capacity needs by utilizing the J.B. Hunt 360° platform. As it pertains to both segments, our goal remains to leverage our J.B. Hunt 360° platform and make investments that will allow us to scale our business by outpacing the market. While the market is challenging, we are focused on controlling our costs. That said, we do remain committed to our long-term investments in our people and technology to deliver exceptional value for all of our stakeholders. Wrapping up quickly on 360°, we have built the foundation of our platform and what we need to commercialize to our customers and carriers. Our task now is to scale and optimize these investments. As you might have noticed, we did back up on some of the stats on 360, both on a dollar and a percentage basis. A significant portion of that is market-driven, but some of that was intentional in the quarter. We did have to insert some manual processes and restrict some third-party capacity on the platform to manage risks around several large cargo theft rings. This did impact profitability in both segments in the quarter. That concludes my comments, so I'll turn it over to Brad Delco to give some instructions before the operator opens the call for Q&A. Thanks, Brad. Sierra, in the interest of time and based on the number of callers we have in queue, we're going to do one question with no follow-ups. Absolutely. Sierra, you can open the queue for questions. If you'd like to ask a question, please press Star followed by one on your telephone keypad. To remove your question, press Star followed by two. As a reminder, if you're using a speakerphone, please remember to pick up your handset before asking your question. Our first question today comes from Jordan Alliger with Goldman Sachs. Please proceed. Yeah, hi. Question. You know, can you maybe touch base a little bit on a little more color around the customer signals you're hearing on intermodal? I know it's a sort of a cautious outlook, but perhaps relative to what you were thinking in January with inventory restocking, even thoughts on second half peak season. You know, is there any sort of change in signaling from when you guys talked to us back in January? Thanks. You know, throughout the quarter, I think we were successful in the bid cycle, and some of that volume hasn't really materialized. Our customers throughout the quarter did remain optimistic for a stronger volumes in the second half of the year. We shared at multiple conferences that we are slightly less optimistic than our customers. At the end of the day, our volumes and customer bid compliance is at an all-time low. That naturally creates some question marks. You know, our customers want more of what we do when they need it. Import volumes are clearly not not strong. There's question marks out there about what will happen in the second half of the year. As the quarter went on, I would say we're slightly less optimistic. We've said that multiple times. outside of that, I don't know what else to say other than I know our customers do want our capacity as soon as the import volumes return to normal. Thank you for your question. Our next question comes from Jonathan Chappell with Evercore. Please proceed. Thank you. Good afternoon. Darren, I'm going to stick with you and the bid process. You said you're encouraged by the results so far. Can you just explain a little bit? Are you encouraged by the wins you're getting? Are you encouraged by pricing maybe being a bit more resilient than maybe the freight recession that Shelley referenced would typically indicate? If to the extent that it's the latter, any type of numbers you can give around kind of year-over-year or sequential pricing comparisons within those bid processes? Yeah. I'm not going to give any guidance on this call, to be clear. I think we're encouraged by both, and encouraged by both price and volume, meaning, I think we're winning volume that our customers believe that they will have. Encouraged by price in that I don't think it's behaved any more challenging than what we expected coming into the year. Look, there's challenge on price. There's also cost to take out. Part of the cost to take out comes with volume pouring over the top. We're encouraged by the volume wins we've received on paper. We are, we haven't seen all that volume yet, so there are, again, kinda like the last question, still a handful of question marks out there. I would say the bid season, I remain optimistic about our future. There is going to come a day when imports improve from where they are. When will that be? I don't know the answer to that. It will improve, and we stand to gain tremendously when that happens. Thank you for your question. Our next question is from Scott Group with Wolfe Research. Please proceed. Hey, thanks. Afternoon. Darren Field, you've got 17% of the boxes parked in Q1. Are you still buying boxes? And parking more? Are there any green shoots that have you unparking any boxes? You know, as I look ahead, I suspect intermodal price probably moves lower from Q1- Q2. In that kind of environment, can intermodal margin earnings improve from Q1- Q2, or does price naturally just take the margin earnings down a bit more? Well, number one, I'm not gonna guide you on that second half of that question. I think as it relates to the equipment and storage, you know, when we buy our equipment, we're buying it for the long- term. When we announced in March of 2022, a pathway to 150,000 containers over 3-5 years, that's because the opportunity that presents itself to us for the long- term is significant. We did slow down onboarding equipment during the first quarter from the run rate we had been on in the back half of 2022. Velocity from our rail providers as well as customer unloading has unlocked a tremendous amount of capacity. Our opportunity to grow even while equipment is in storage remains intact, and we have ample capacity to do what we need with our customers. Look, in terms of the margin profile as we move forward, you know, we continue to be confident in our ability to take cost out as we pour volume over the top. We have long-term margin targets that are not being changed, and we're confident in our ability to win and grow with our customers at acceptable returns. Thank you for your question. Our next question comes from Christian Wetherbee with Citigroup. Please proceed. Yeah. Thanks. Good afternoon. Darren, maybe sticking with you here just in terms of just the outlook for Intermodal for 2023, you were pretty clear on the last conference call about your expectations for growth from the business. I don't wanna put words in your mouth, I just wanna make sure I understand sort of what your expectations are for whether it be revenue, loads, profit for the segment for 2023, and what maybe has changed, if anything. Listen, on the fourth quarter call back in January, I did say, I expected to grow revenue, loads, and income. J.B. Hunt's a growth company. That's our expectation around here every day, no matter what the conditions. That statement wasn't intended to be guidance, but clearly that's how it was interpreted. Again, as we go through the year, we're working with customers, talking to them about what their expectations are, and that largely defines our own. As we go through, as we were coming into the year, we probably had a lot of confidence in demand growth as 2023 went on. At this point, our customers have been less accurate than ever before, we're still waiting to see what happens. I, as far as an update to that statement, I don't have an update for you. I know our system is built to handle 15%-20% more, as I said in my prepared comments, and we look forward to growing with our customers through the rest of the year. Thank you for your question. Our next question is from Justin Long with Stephens. Please proceed. Thanks. Good afternoon. Maybe I'll just take a step back from Intermodal. John Roberts, I had a high-level question for you. If we see weakness in the freight market and the economy persist into the second half, how does that change the way you think about managing the business in terms of both your growth plans and the cost structure? Are you already making any pivots today based on how your expectations for the rest of the year have evolved? Hey, Justin. Well, I think, you know, the real question is the timing. Darren just said it. I talked to Shelley earlier today about the same idea, that it's not a really a question of if. The freight demand will come back to normal. It's just really a question of when. Having the experience that we have around this table has really helped us position our thinking and our direction because we've been through freight cycles in the past. Some of us have been through quite a number of freight cycles in the past. We know these times are coming, and if you look at what we've done with the company over the last maybe 10 years or so, every time we go through a cycle, we learn something about how our business runs up and then back down. We have made very serious and intentional decisions about, for instance, how we place assets. You'll note that, I think, Brad, in your comments, we've transitioned essentially all of the power into dedicated, where we can monitor it differently because we can see things in Dedicated's business model in a way that we like differently than we can sometimes see in a network model. If we look at where we are right now, and we think, Oh, well, maybe this timing, we didn't quite get that right," that's gonna be part of the reality that we live in. Because we have the experience and because the folks that are around this table have made mistakes and made good decisions, I think we're really just questioning how we time our re-entry into a more normalized system. Now, we are in leadership positions in many of our businesses, and our customers really appreciate that. We can handle scale. We don't want to lose any of that positioning value. I can say that right now, as we started to see the year present itself a little differently than we had expected from our planning sessions, immediate action and intense focus has been taken on elements of cost. As Darren pointed out, you know, we're r unning our playbooks through bids. I think Nick Hobbs will comment on, you know, what his business looks like, what we're seeing in the world of Highway Services. You know, those things are teaching us that we've got to be a maybe a little bit more fluid. It's a word that Shelley used with me earlier today. I am aware, of course, we're not going to speak of details, but I'm aware of many efforts and elements that are ongoing today that will really continue to help us stay healthy while we get to that other side, which we know is not a question of if it will present itself, but when. We just have to be patient and careful and thoughtful. Thank you for your question. Our next question is from Amit Mehrotra with Deutsche Bank. Please proceed. Thanks, operator. Hey, Darren, I just want to circle back on the bid compliance. I think a couple of quarters ago, you talked about 60%-70%. Where is that number now? Just trying to get a sense. Just, you know, you've always talked about a lot of costs in the system that can come out. I guess another way to ask it, you know, when I look at operating profit dollar per load, it's basically almost doubled from 2020 to 2022. I guess the question is, how much of that gain do you think you can hold on to as the volume environment remains challenging and there's like a pricing reset really at the start of the back half of the year? bid compliance and then kind of talk about, you know, your ability to maintain the line on operating profit dollars per load. It is impressive how you guys get more than one question in. Bid compliance is sub-60, middle 50s. It's terrible. It's an all-time worst. We'll see when that improves. Obviously, you know, our transcontinental business is largely tied to imported goods, and there's real significant challenge with bid compliance on that business. It's pretty poor. The cost takeout, one of the thoughts there has been, hey, we had weakness in velocity, so spreading the fixed cost of owning the equipment over more loads with better velocity is a cost takeout, but that comes with volume. We had driver productivity challenges as a result of poor rail service, and as rail service improves, we get stronger driver productivity and better utilization of our drayage assets. That's a cost takeout on per load economics. You know, and then just staffing and overhead and how do we pour more loads over the system without adding overhead? All of those actions are available to us that come with volume. Will we sustain the current op income per load? I don't have any idea. I know this, that we're going to be happy with the return profile on our business, and our customers want more of our product, and I think that gives us an opportunity to price it fairly and anticipate a fair return for the work that we do. We must provide them an excellent customer service experience, and we have to be good at communicating what their experience should be like. I don't have any guidance on Income per load. What I know is, we have a long-term margin target. We'll live within those boundaries. We expect that our return is gonna be warrants reinvestment in our business. Thank you for your question. Our next question comes from Brian Ossenbeck with JP Morgan. Please proceed. Hey, good afternoon. Thanks. Just to follow- up on the, I guess, normalization of operating profit per load. Can you just talk about the congestion fees? It sounds like the costs are still there to come out, but what about the congestion fees if you're not really seeing the detention times, you know, as high as they were at the customers? If you can just talk broadly on Safety. You did mention it a few times. I think it might be a little hard to move the needle, but it has been a challenge in the past, so be curious to hear your thoughts on how quickly you can make some improvements there. Thank you. I'll quickly touch on the storage fees. That's the totals is really what I think you're getting at. We highlighted many times, you know, we're not gonna break that out. I don't think that, you know, we've said before, don't over assume how much of a factor that is in terms of our income. Clearly, customers are unloading faster. That revenue was down in the quarter year-over-year, the results are the results. The cost takeout does come faster with volume port of the system. I'll let Nick comment on safety. I'll take the safety question. We were faced with some challenges clearly in Q1. Saw some last year. We had a tremendous growth. In the meantime, we have tremendous growth across the organization with new managers, new drivers. It presents some challenges to us. We're encouraged by the progress we're making. Still got a long way to go. In addition to that, the inward-facing cameras, we're rolling that out. We think that's gonna. Well, we know it's gonna take us another year and a half to two years to get fully implemented, but we're encouraged by the progress we're seeing there. I would just say, we're focused on it and we'll keep chipping away on our safety numbers. We've seen good results so far at the end of Q1, from what we've seen. Thank you for your question. Our next question is from Allison Poliniak with Wells Fargo. Please proceed. Hi. Good evening. Just on Intermodal volumes, could you maybe talk about the sequential trends you saw in the quarter and how they compare with what you would typically see in terms of seasonality in Q1? Just any thoughts there? Well, I mean, we highlighted -2% in January, -4% in February, and -8% in March. I think that, you know, we would normally anticipate our volumes to be improving year-over-year every month of the year. Historically, the first quarter might actually trail the fourth quarter in terms of volume, and then you build back up over the course of the year. I would call that very normal that Q2 is growing over Q1, Q3 even over Q1, and then Q4 is gonna be your strongest quarter. Take a little step back in the first quarter of the next year and then keep growing. That is, that's probably a 15-year historical view that would be very normal. Right now, you know, when I go back to a year ago, you know, volumes were really strong. I think the second quarter last year was probably our record volume quarter, year quarter at any time in any year. You know, imports were strong. As the second half last year continued, import flows began to change. So we'll have to see what that means this year. As we move into the rest of the year, we do anticipate that we can get back on a growth trajectory. We're also in a little bit of a wait and see and wait for customer to compliance to improve and demand particularly on the West Coast to improve. Thank you for your question. Our next question is from Ken Hoexter with Bank of America. Please proceed. Hey, great. I guess John, Shelley, or I guess, Brad, just to continue on that. I, you know, we noted, you noted we're in a freight recession, accelerating declines with down 8%. I guess you're saying that it gets even tougher as you move into April and 2Q. I guess, are there any signs of, from an ICS point of view, seeing capacity come out? Is there anything you're starting to see peaking out of inventory levels? Any signs on how we could see this peak out, or is 2Q gonna be, it sounds like from that last commentary, maybe even worse than 1Q? Yeah, Ken, this is Brad. I'll start from an ICS perspective, and anybody else is free to add in there. You know, as we came into the year, Darren covered nicely what our kind of macro thoughts were. We're seeing more pronounced in highway and in ICS in particular, the freight recession impact. You know, we're not really seeing a high volume of carriers exit at this point, although you can see in our reported data that we did reduce our active carriers. That was in part to my comment on some of the theft that we saw occur. In the quarter, we kind of culled out and established new parameters there. That's not an indication necessarily of carrier loss. It was our processes and protocols that we implemented to create better protection for us against that specific set of circumstances. Quite frankly, the market itself, more pronounced in spot, we were a little bit over-indexed through the height of the pandemic in assisting our customers in their disrupted need. Quite frankly, we, you know, we were probably behind on the published side coming into this current environment. We've worked tirelessly to recover from that, and I think you can see, we're north of 60% on published freight at this point in time. Obviously, the heavy volumes in spot and what occurred to spot in the back half of last year and the first part of this year, was a negative to our overall book and our overall performance. Hey, Ken, I might add just a couple things to that. you know, we do see a low point of what's happening in spot. From a capacity perspective, our evaluation of how carriers can perform in this environment makes it very difficult for spot to go significantly lower. I'm not suggesting we've completely found the bottom, but we have seen a more leveling out. Yes. -of what's happening in the spot market. Just from a capacity perspective, you know, we estimate that they are losing money to breaking even at this point and have been for a period of time. Typically, that can't last for a long period of time. The one note that I would say, from an inventory perspective, you know, we did spend a lot of time with our customers. I think they are struggling to really forecast what consumers are going to do. It's one of the reasons that we're more cautious on our outlook. Certainly what Darren talked about on IMC compliance, that's just an intermodal. JBT is similar. The brokerage side is even worse than that. Across all of our transactional businesses, I would say it's been very difficult for our customers to forecast. I think that's the reason we're not giving any more color, as to what we think for the back half of the year. We can go off of their optimism in them wanting to purchase our services, I think it's just a little more caution from us, as to what the timing will be in total. Thank you for your question. Thank you. Our next question is from Tom Wadewitz with UBS. Please proceed. Yeah, good afternoon. Wanted to see if you could give some comments on the revenue per load in intermodal. We saw, I think it's about a 9% decline sequentially, 1 Q versus 4 Q. Is that a function of lower contract rates, or is that accessorial and other? Maybe just kinda how we think about the cadence of when new contract rates affect the business. You know, did you see that in 1 Q, or does that really not start until 2 Q? Thank you. Okay. Well, I think, there's a lot in that question. Mix of our business can play an enormous role. We highlighted that we were -9% transcon +1% east. That's going to influence our overall revenue per load. Certainly all of the factors you highlighted are part of it. In terms of the way we implement pricing, what we've highlighted multiple times is we implement approximately 30% of our business in Q1, 30% in Q2, 30% in Q3, and 10% in Q4. Current cycle, you know, I don't know that it's any different than that. There's, you know, customers, our ability to predict what's going on with that, I mean, Shelley just highlighted it. It's never been more challenging to know, just what's going to happen with volumes. I said earlier, I mean, the pricing market has largely behaved like we would have expected. We expected some negative pressure on price. I don't know how to give you any kind of further info on what to expect with price. I just know that, certainly the impact of shorter length of haul and growth in the east more than transcon. Once our transcon gets back to normal, you can expect that that would be helpful to the revenue per load. Thank you for your question. Our next question is from Ari Rosa with Credit Suisse. Please proceed. Hi. Good afternoon. We've seen a lot of changing dynamics out west, obviously with some of your IMC competitors, switching between railroads. I'm a little surprised to see, I guess, the extent of the weakness in volumes. I was hoping you could just talk about the dynamics of what's driving the weakness out west. Is it really just that kind of International Intermodal business, or is there an element that's being driven by competition? Then in that context, how are you thinking about your ability to, longer- term, to take share, particularly in the west? Thanks. Okay. Well, let me be very clear. I don't believe we're losing share in the West to a competitor. I feel very confident that our customers want our business. We'll have to prove it that we're taking share, but I feel very confident in our competitive environment against IMCs on the Union Pacific. Largely the weakness in the West is almost purely related to the import economics. International intermodal that comes in and goes intact is down, but so is just imports in general that feed warehouses throughout California and then create full truckload shipments out of there in the transload model. All of that business is down, but I do expect and anticipate that J.B. Hunt is growing share in all markets in intermodal. Thank you for your question. Our next question is from Bascome Majors with Susquehanna. Please proceed. You know, heading into the year, it didn't feel like either Hunt or retailers are really rolling in the market. There was a lot of expectation for import recovery, either on the West Coast or nationally in the first quarter. I wanted to drill into a little more of what was the most impactful change that really caused you to discount your optimism over the two and a half or three months since we talked in January? You know, on the other side of that, what one or two shifts do you want to see either in data you track or your customer messaging to ratchet that optimism back up? Thank you. Well, I mean, I don't, I don't know that we anticipated strength or a rebound in imports in Q1. When we talk about what might have gradually changed over the course of the quarter, again, it was that compliance and just continued uncertainty from our customers about what the consumer was gonna do and what orders would be like. I think we felt that a lot in the first quarter as we met with customers, you could see as time went on, their ability to forecast and even know what to expect, we had questions, and that's what has created our change to some degree. What do we need to happen? We need imports to improve. We need a West Coast labor agreement to finalize and give customers confidence in the West Coast import programs. more than anything, we need the economy and the goods economy to improve. That will drive the fastest response, and inventories to bleed off. Bascome, I would add to that. I think we're using our experience through the cycles, to create more cautiousness in what we think on the timing for 2023. We have a lot of customers asking us those questions. I think they have a lot of optimism, and they want things to improve. We don't have the data to help support some of that, so I think it's more of our experience, that's having us have a slight change. You know, I spoke earlier that we're less optimistic, but it is a timing issue more than anything. Thank you for your question. Our next question comes from Brandon Oglenski with Barclays. Please proceed. Hey, thanks for taking my question. If you could just talk a little bit about dedicated, and just what the expected pace is for truck sales this year, whether you're expecting customers to lean maybe a little more into dedicated, given some of the services it's gonna provide in 2023. Yeah. Well, good. Thanks for that question. We've been talking about and looking at our sales compared to last year. Last year was just terrific. Our sales have slowed down a touch. We're very optimistic when we look in the pipeline. We're starting to see some of our customers really ask some questions on some private fleets that we're working on to really take out cost and using our engineering resources to really not just put out a procurement bid, but really how can we do things more efficient since their volume is down. We're encouraged by that. I would say we still will hit our targets. We feel comfortable hitting our sales targets that we lay out every year. We're optimistic. Our volumes in general are okay, I would say, in Dedicated, so we're continuing to go to the stores and all the things that we do on a consistent, not robust, but we have a lot of interest from a lot of different customers, looking for us to help them with some solutions to take out cost, and we think that plays into our strength very nicely. Thank you for your question. Our next question comes from Elliot Alper with Cowen. Please proceed. Great. Thank you. Staying on the dedicated side, you spoke up about the pipeline beginning to soften a bit. I guess, is there anything more you can share on that? Are these customers reducing their freight needs by, say, X number of trucks, or are you seeing pockets of weakness in certain product categories? Yeah. I would say we're clearly seeing some weakness when it comes to building and construction. It's where we're seeing some stuff, and we kinda look at it by industry, kinda on the home side around that. Overall, I would just say, when I say it's slowing down, we're seeing decisions. We got a lot of stuff out there we're waiting decisions on, and our customers are a little more skittish on making decisions, trying to figure out what's happening with their core business. We've seen more decisions in the last couple of weeks pick up from what we'd seen the previous month. Hopefully, that's a little bit of a little bit of light in our area, but we feel very optimistic about it. Thank you for your question. Our next question is from Bruce Chan with Stifel. Please begin. Good afternoon, everyone. Maybe just to clean up here for John Kuhlow, specifically around the segment realignment. I'm wondering if there are any savings that, you know, we should expect in that process, just in terms of leveraging people that, you know, maybe perform similar functions, or is that really just more of a reporting or commercial impact there? Yeah, you know, I don't, I don't wanna draw too much attention to this. It was a little bit more of a reporting. In looking at our services, we felt like those, as we talked about, we felt like those services should, could be better managed and or more aligned in some of the different segments. That's why we made the move. We do feel like once in those segments, there can be some margin improvement there. For the most part, it's more of an accounting and reporting issue to get those more aligned to where the other similar services are. Thank you for your question. Our final question is from David Vernon with Bernstein. Please proceed. Hey, good afternoon. Thanks for fitting me in here towards the end. I'm wondering if you could maybe talk about your posture into this bid season. Are you kind of approaching it in a more balanced fashion? Are you focusing on maybe a little bit of share take, just given that we're in what sounds like, based on your commentary, a temporary downturn in freight demand? I'm just trying to think about how you guys are thinking about managing this per-period of uncertainty, particularly around the intermodal bids. Well, I'll start with Highway. You know, we've been very public in our desire to grow our published volumes in particular in ICS. We have had success in doing that, not enough at this point to offset the overall decline in freight demand. I will highlight that we did see growth inside of our J.B. Hunt 360box offering in the quarter, double-digit growth, very satisfied with the trajectory and the growth of that particular product offering for our customers. You know, we have largely met our bid goals. However, as mentioned numerous times, not just in intermodal, but on all of our transactional businesses, the bid compliance from our customers is at an all-time low. We've really yet to see or feel the benefit of those wins at this point in time. Obviously, as mentioned, we don't have really a good crystal ball as to if, not so much if, but when they will recover it. I'll hit on intermodal on that question, you know, from a posture going into the bid cycle. I mean, we spent the better part of 2021 and 2022 without enough capacity to truly do everything that our customers wanted us to do, caused by weakness in velocity, caused by slow unloading, slower rail service. Our posture in this bid cycle and the 2023 bid cycle has just been to communicate with our customers that things are normalizing with our velocity and our capacity. We went out and acquired and announced publicly a mission to grow our capacity up to 150,000 containers in 3-5 years. We're trying to really give our customers confidence that we're gonna be there for them, that we're aware that costs had increased for them, and that we felt like we could get some cost takeout by growing volume in our system. Our approach has been to grow with our customers, but our approach is always to cover our investment with appropriate returns. That's a balancing act. If you're asking, did we just set out to take share? We set out to grow 'cause that's always our mission. That will be our mission next tomorrow and the next day and from here on forward. That was our posture as we move into the bid season. Thank you, Darren. I do feel like our mission is to help our customers continue to take costs out of the supply chain. We've outlined how we can do that through all of our segments. Let me say, we've talked about thriving in any market, and this is a tough market, but there have been good fundamentals happening inside of our businesses. You know, I think in the first quarter, you saw the resiliency of our Dedicated Contract Services model as they recorded a record quarter one to other quarter ones in both revenue and operating income and still continued demand from our customers in that segment. We're proud of the work that's happened in intermodal, and we have a healthy business model. We did a great job on our quality of revenue and continuing just maintain and stay within our margin targets while having a lot of demand from our customers for our long- term. 360box has grown in an environment that's had declining volumes in total, signaling that our customers continue to want our services in those areas. We are very pleased with the progress, but yet want to continue to move forward in our Final Mile segment on improving our financial performance there. Finally, we are seeing some improved fundamentals as the quarter progressed and here coming into Q2 in ICS as they are carefully managing their cost in tech and people relative to what's happening in this environment. While we're cautious on the timing of the recovery in this freight recession, we're gonna focus on striking a balance between short-term managing our costs to more align with current volumes while being prepared and ready for long-term growth with our customers that will drive long-term compounding returns for our shareholders. We will remain committed to our three core fundamentals: our people, our technology, and our capacity. Might I say, Darren talked about our people and our Say, Do culture, and it is the number one focus organizationally, how we drive long-term compounding returns for our shareholders and how we drive more value for our customers is leaning into our people, taking care of our people, and making sure that they can trust us, our customers ultimately trust them, and as a result, we grow over the long- term. I want to say thank you to the people that have been performing for us. It has been a difficult environment, but they can weather the environment as we went up during the pandemic. We're seeing the same decline just on the inverse of what happened on the incline. I cannot say enough about what our people are doing to deliver. Sometimes our results don't always show the hard work and effort that's happening as a result, over the long- term, we feel confident that our people will get to see the fruit of their labor. Thanks, Shelley. I'll just close us by saying that as we look at this turbulence, we are very confident in our structure overall. Our asset structure for each business makes sense to us in a way that it hasn't always for me. I think we finished a lot of the work coming into 2023 that needed to be done so that things like J.B. Hunt 360box could have a chance to get that traction it's looking for as a very unique and we think very needed service. I'm thankful that we asked a question here about dedicated, although it did take 50 minutes of the one-hour call to get to it because I think we're again reminding everyone that that's a very different business than I think it is interpreted as. In this tough climate where you see radical changes in some of our channel demand, you see a real steady state, a very resilient business that is asset intense, but also has a very different rate and contract structure that we are the industry leader at providing. I think, you know, when we take it up to return on invested capital, we look at the performance of margins in intermodal at this point, we look at the performance in all of the businesses that do require more capital. That's why I say I think we're in a better position than we've ever been in. Shelley talked about, you know, responding to the market signals. The market changes. Right now, we are doing that. I think there is a very, very quick response at this level with this team to address challenges that are weren't expected necessarily. With the most important part of that conversation being about the long- term. We are a long-term company. Our addressable market is somewhere in the high hundreds of billions of dollars. When we say we're a growth company, that's because as industry leaders, we have fractional percentages of the markets that we serve, even in the number one spot. We like where we're at. We have a strong view. We will make tweaks. Remember on CapEx, when you think about that, a good portion of our CapEx is replacement. We had plenty of trouble through the pandemic in getting equipment replaced that we needed. I think we will look at timing on other elements of CapEx expansion and growth. With DCS, that model is a pull system anyway. It only triggers being our heaviest demand when it is asked to, after a deal is closed. I think that that all goes back to the idea of probably more cautious about the rest of this year than we were three months ago to that question based on the facts and data that we're seeing, and we will respond. We know this, last point. It's not a question of if this is coming back. It's just a question of when and what position will we be in when our customers start ringing our phone again in ways that they have in the past. Thank you for calling in today. That concludes the J.B. Hunt 1Q 2023 earnings conference call. Thank you all for your participation. You may now disconnect your line.