Ladies and gentlemen, good afternoon, and thank you for standing by. My name is Abby, and I will be your conference operator today. At this time, I would like to welcome everyone to the J.B. Hunt Transport Services second quarter 2024 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session, and if you would like to ask a question during that time, simply press the star key followed by the number 1 on your telephone keypad. If you would like to withdraw your question, press star one a second time. Thank you, and I would now like to turn the conference over to Brad Delco, Senior Vice President of Finance. You may begin. Good afternoon. Before I introduce the speakers, I would like 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 risks 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 key 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 President and CEO, Shelley Simpson, our CFO, John Kuhlow, Spencer Frazier, Executive Vice President of Sales and Marketing, our COO and President of Contract Services, Nick Hobbs, Darren Field, President of Intermodal, and Brad Hicks, President of Highway Services and Executive Vice President of People. I'd now like to turn the call over to our CEO, Ms. Shelley Simpson, for some opening comments. Shelley? Thank you, Brad, and good afternoon to everyone on the call. I'd like to start by saying I'm humbled and honored to have recently assumed the role as CEO and to lead our great company on the next phase of our growth journey. While recognizing this is a big moment as only the 5th organizational leader in our company's 62-year history, let me be clear: Our vision, our mission, and our focus has not changed. We have large addressable markets. We provide excellent service for customers. We have talented people across our organization. We are primed, and we are ready to execute on our opportunities for growth. My message to the team on day 1 was quite simple: Ready, set, go. As you've heard us say consistently, we remain committed to our investments and managing the business with a long-term mindset. These investments span across our company foundations, which include our people, our technology, and our capacity. Through investments in these key areas, we have a significant number of opportunities to provide value to and on behalf of our customers across our suite of complementary service offerings. Our focus remains on deploying capital in areas of the transportation industry where we see a long-term opportunity to generate compounding returns. We operate in an industry that is cyclical, but we have focused on businesses and areas that we feel confident we can compete effectively, take share, and win. We do this by remaining financially disciplined, keeping our focus on the long term while managing costs in the near term, and relying on our vast experience. We will be prepared to meet the growing needs of our customers while driving long-term growth for the company and our shareholders. Earlier this year, we introduced our priorities for 2024, and we as a management team and as an organization, continue to execute on these priorities, which, as a reminder, are: 1, to deliver exceptional value to our customers through operational excellence. 2, scale our long-term investment in our company foundations, which are people, technology, and capacity. And 3, drive long-term value and returns for our shareholders. While the first half of this year has been challenging in terms of our financial performance, we remain focused on delivering exceptional value to our customers. In 2024, we've continued our record performance in safety, and our service levels to customers has been exceptional. We have received multiple awards this year for our high service level from our customers. Our joint intermodal service offering with BNSF, Quantum, is running well above our initial expectation from an on-time service performance. In Dedicated, we continue to prove our value to customers as we've been able to balance the need to be disciplined with underwriting new business while providing customers some flexibility with meeting their needs. Final Mile continues to make progress on its profit improvement plan, and we continue to work on areas around cost, integration, and growth in ICS and see some progress in the business. Finally, we remain encouraged about the value proposition for customers in our drop trailer business in JBT and the future potential of that business. While admittedly, the market has been challenging, we have invested throughout this downturn to set us up for future growth and success across the business. We continue to focus on controlling expenses in the near term without jeopardizing our long-term potential, managing our headcount through attrition, while at the same time continuing to deploy and enhance our technology to increase the productivity of our people. We took advantage of a strategic opportunity to acquire the intermodal assets from Walmart earlier this year, which added capacity to our network, but also increase the long-term growth potential of our company, which we believe will drive long-term returns for both the company and our shareholders. The team will provide more details with their prepared comments, but in summary, we will stay the course, focused on the long term, with the same vision: to create the most efficient transportation network in North America. With that, I'd like to turn the call over to our CFO, John Kuhlow. John? Thank you, Shelley, and good afternoon, everyone. Similar to recent quarters, my comments will cover a high-level review of the quarter and provide an update on our cost control efforts, while also balancing our investments to support future growth. I'll close with an update on our capital allocation plan for the remainder of 2024. As a general overview, while we have seen some moderation in inflationary cost pressures, the deflationary rate environment continues to pressure our margin performance. Let me start with a quick review of the second quarter. On a consolidated GAAP basis, compared to the prior year period, revenue declined 7%, operating income declined 24%, and diluted earnings per share decreased 27%. A combination of either lower volumes and/or yields, but most notably lower rates, were the main drivers of the lower revenue, primarily in our intermodal and highway services businesses, which includes our brokerage business in ICS and our drop trailer business at JBT. Our tax rate in the quarter was slightly elevated at 26.8%. However, we continue to expect our full-year tax rate to fall in the range of 24%-25%. While we have seen improvements across many of our cost categories, the lower revenue continued to put pressure on our margins across our business segments, with the exception of FMS and JBT, which improved operating margins year-over-year. We have been thoughtful and thorough in our approach to managing our costs. Last quarter, we quantified what our commitments to investing in our business through this downturn represented, which was an aggregate $100 million on an annual basis. We continue to focus our cost efforts in areas that would not prohibit our ability to support our future growth or our future earnings power. These costs are primarily related to our investments in two of our company foundations, namely our people and our capacity. As to be expected, the majority of these costs are burdened in our JBI business and also, but to a lesser extent, our ICS and JBT segments. Importantly, we remain confident in our ability to grow our business to scale into these investments. Wrapping up with an update to our 2024 capital plan, we are updating our guidance for net capital expenditures for the year to be in the range of $650 million-$700 million. This compares to our previous expectation of $800 million-$1 billion. Keep in mind, this does include the previously announced purchase of Walmart's intermodal assets. This reduced plan largely reflects a moderation in both tractor and trailing fleet additions, in addition to real estate projects. While our earnings performance has been under pressure, our leverage at the end of the quarter was 0.9x EBITDA, below our target of 1x. We also purchased just over $200 million of stock in the quarter. With our updated and reduced net capital expenditure plan, current market dynamics, and our view of where we are in the cycle, we believe a disciplined approach to share repurchases is a prudent use of capital at this time. This concludes my remarks, and I'll now turn it over to Spencer. Thank you, John, and good afternoon. It's a pleasure to be joining the call. My remarks will focus on our sales and marketing strategy, but will also include some perspectives on the market, as well as feedback we are hearing from our customers. During the second quarter, we saw more normalized seasonal patterns across our business. On the demand side, the second quarter felt more like what we're accustomed to seeing prior to the pandemic disruption. April started a little slower from a demand perspective, primarily due to the timing of Easter, but we did experience what used to be a typical end-of-month and end-of-quarter lift in June. This was evidenced particularly in both JBI and JBT in the quarter, where we've seen strong improvements in bid compliance levels in the mid-80s to 90s levels, which we haven't seen in quite some time. We were able to meet this seasonal demand for our customers with high service levels across our businesses. Our customers have worked through most of their excess inventory and feel appropriately right-sized with current sales activity levels. While we cannot predict when the market will inflect, our customers know we stand ready to meet their growing transportation needs across our entire suite of services. Regarding our suite, our customers buy capacity across our suite of services and have come to expect a consistent, high service level experience. In fact, greater than 90% of our top 100 customers buy more than one service from us, and greater than 75% buy from three or more services. Among our segments, JBI and ICS have the highest overlap amongst our top 100 customers. We see the power of the 360 in our sales efforts as customers have recently wanted to de-emphasize their use of brokers in favor of assets, and we've converted some nice wins over to JBT as a result. Being mode indifferent and offering customers the best solution will always guide our go-to-market strategy. As we look at the overall freight market, we still see oversupply across all modes, with shippers having options on both mode and provider to move their freight. Now, while capacity is not a top concern right now, there is an awareness that this will change at some point, but the timing of which, though, remains unclear. Currently, cost and value are the primary differentiators right now for customers, and we continue to lean into the value we can deliver to customers with our premium service. As we have said in previous quarters, we don't know when the cycle will shift and aren't going to make a prediction. But we remain committed to investing in our business for the long term and being ready to grow with our customers over many years to solve their transportation needs with high service levels they've come to expect from J.B. Hunt. I'll wrap up with some of the feedback we're getting regarding peak season. We see the same data sets that most of you track and read the same headlines around what's happening in the ocean freight market. The feedback we hear is an expectation for a peak season this year, but the magnitude or length of peak remains to be seen. That said, some customers have pulled a portion of their peak freight forward a couple of months, given the multiple macro factors that could impact the supply chain later this year. This pull forward has created an early peak on the water, but that hasn't translated into domestic inland moves just yet. We are working with customers on peak season plans to ensure we have resources properly positioned to meet their transportation needs. That concludes my remarks, so I would now like to turn the call over to Nick. Thanks, Spencer, and good afternoon. I'll provide an update on dedicated Final Mile business and give an update on our areas of focus across our operations. I'll start with dedicated. While we are not immune to the impact of the overall market, we believe our results during the quarter continued to highlight the strength and resiliency of our unique dedicated business model. We believe our differentiation is supported by our focus on providing professional, outsourced, private fleet solutions to a broad and diverse group of customers, in addition to our relentless focus on delivering value to our customers. During the second quarter, we sold 325 trucks of new deals. While we have visibility to some losses or downsizing throughout 2024, our sales pipeline remains solid, and our team has done well to backfill some of those losses. Despite the challenging market conditions, importantly, we have remained committed to our discipline and the types of deals we underwrite without sacrificing our return thresholds. With a proven track record of high service levels and our ability to create value for our customers, we continue to have success onboarding new business and renewing business with our existing customers. We remain confident in our ability to execute on the transportation needs of our customers and the opportunity to further compound our growth over many years. Going forward, despite our strong new truck sales in the first half of the year, I would expect our fleet count to end the year relatively flat from our Q2 levels, with some additional startup expenses as new trucks are brought into the fleet. Shifting to Final Mile. I continue to be pleased with our progress we have made to improve the overall health of this business. This journey started many years ago as we focused on a differentiated, high-quality service, to then focusing on revenue quality and remaining cost discipline throughout the process. The market for big and bulky delivery continues to evolve, and customers are looking for a high-quality, safe, and secure service provider with national scale. For transparency purposes, our second quarter results did include a net benefit of $1.1 million from two offsetting claim settlements. Demand for big and bulky products remain mixed, with stable demand for both appliances and exercise equipment, but continued softness in furniture demand. We remain modestly encouraged by our sales pipeline and continue to see new brands engage in discussions with our team. We continue to strive to provide the highest level as we deliver products into the homes of our customer's customer with a focus on being safe and secure. We will remain disciplined with potential new business to ensure appropriate returns for our service, while we work to grow the business and improve profitability. Going forward, we would expect some customer churn as we continue to focus on revenue quality, but for margin performance to follow fairly normal seasonal patterns, excluding the unique item called out in the quarter. Similar to the last quarters, I'll close with some comments on safety. Our company was built on a foundation of safety for not only our people, but also the motoring public, and we continue to invest in training and equipment to enhance our already strong safety culture. We continue to lead the industry with our fleet that is now over 97% rolled out with inward-facing cameras, and we remain on track to be 100% complete by the end of the third quarter. As you may recall, 2023 was our best safety performance on record for DOT preventable accidents per million miles, and I'm pleased to say, with the help of our inward-facing cameras, along with our numerous other innovative safety initiatives, we are seeing further improvements so far year to date. This is a testament to the quality of our drivers and the safety culture of our company. As the cost of claims continues to move up exponentially, we remain focused on finding new innovative ways to further enhance our safety performance and mitigate risk where possible. This concludes my remarks, so I would like to now turn it over to Darren. Thank you, Nick, and thank you to everyone for joining us this afternoon on the call. I'll review the performance of our intermodal business during the quarter. ... give an update on the market and service performance, and highlight the continued opportunity we have to deliver value for our customers and all of our stakeholders. I'll start with Intermodal's performance. Overall, while we saw seasonality that resembled more normalized pre-pandemic demand trends during the quarter, the impact of a depressed truckload market and competitive bid season in general, more than offset this and drove our volume down 1% year-over-year. This was primarily driven in the East, where we compete more directly with one-way truckload, where our volumes were down 7% in the quarter. This was partially offset by our Transcon business growing 4% in the quarter. We continue to see strong demand out of Southern California, where volumes were up double digits versus the prior year. By month, our consolidated volumes were down 3% in April, up 1% in May, and down 1% in June. During June, we did see a nice seasonal lift in volume, particularly toward the end of the month, and importantly, we were able to meet our customers' capacity needs with strong service levels, highlighting the strength and flexibility of our network. As we look at the freight market, we continue to see a large amount of freight that we believe should be converted from over the road to intermodal, as it is more economical and environmentally friendly. As I've said it before, and I want to say it again, we stand ready and have the capacity and people in place to meet and exceed our customer service needs and recapture share from the highway moving forward. During the quarter, we did see margin pressure both year-over-year and sequentially. This is largely related to the market pressure on our yields, but also due to our capacity investments. While volume does mean more to us now than ever before, given our underutilized capacity, our modestly lower volume year-over-year and only slightly higher volume sequentially, wasn't enough to absorb our higher cost and deflationary yield pressure. As discussed earlier in the year, bid season was competitive and largely wrapped up during the second quarter. We continue to see truckload pricing that we believe is unsustainable, particularly in the East, and shippers took advantage. Given the nature of our pricing cycle, we will be living with a large portion of the recently completed bids into the first half of 2025. With regard to our rail service providers, we have been pleased with the service from each of our providers, their commitment to the intermodal offering, and growing the overall market. That said, we and our railroad partners know the true test of our collective service will come once freight volumes increase with higher overall demand on our networks. We remain confident in the collaborative work and investments being made to maintain high service levels as the inflection occurs. In closing, we continue to strongly believe in the strength of our intermodal franchise. Our customers trust us, and we continue to find new and innovative ways to better serve their transportation needs. Our service levels are exceptional, and we are confident that this level of service can continue as our customers' overall demand for our capacity increases. While we are not pleased with our current results, our optimism on the future growth of our business hasn't changed. We remain excited to work with our customers to meet their growing demand with an efficient, cost-competitive, and more environmentally friendly solution. That concludes my prepared remarks, and I'll turn it over to Brad Hicks. Thank you, Darren, and good afternoon, everyone. I'll review the performance of our Integrated Capacity Solutions and Truckload segments while also providing an update on some of our work in J.B. Hunt 360°. Starting with ICS, the overall brokerage environment remains competitive, with pressure on both volume and rate. Segment gross revenue declined 21% year-over-year in the second quarter, driven by a 25% decline in volume, partially offset by a 5% increase in revenue per load. As you have heard, we did see some seasonality in the business, with some relative tightness in the market around Road check and in the later part of June. That said, our gross margins for the quarter were 14.8%, the highest we've seen since the fourth quarter of 2022, which is noteworthy, given 61% of our volumes are under contract. We continue to focus on quality revenue and growing with the right customers as our yield performance indicates. Admittedly, we are incurring some challenges integrating the previously announced acquisition of BNSF Logistics, but remain encouraged and optimistic about the potential of the agent model on our platform. These challenges are masking some of the underlying progress we are seeing in our legacy ICS business. Going forward, we will remain focused on further right-sizing our cost structure, but ultimately, we need to push more volume through our platform in order to see material improvements in our results. Moving over to JBT or truckload, segment gross revenue was down 12% year-over-year, driven by a 9% decrease in volume and a 4% decrease in revenue per load. Bid season was competitive, and we opted to remain disciplined on price, which resulted in some lost volume.... That said, we are focused on attracting the right freight that best fits our network with the right customers, that see the value of our service and network of trailing capacity. While we currently have excess trailing capacity in our network, we are working on ensuring discipline around our network to ensure that we have the right capacity in the right markets where our customers have needs and where they are growing. We hear from customers that they appreciate our high service levels and the flexibility that our drop trailer offering provides to their supply chains. Our model allows us to be more variable with our costs depending on the market, which we believe ultimately presents us with opportunity to scale this cost-competitive service offering for customers while ensuring we generate an appropriate return on capital. Going forward, our focus is on improving our trailer utilization rate while ensuring our capacity remains balanced across the network. I'll close with some comments on J.B. Hunt 360. Technology enables our people, helps drive productivity, and also drives efficiency in how we source and serve customers with our available capacity. Technology is foundational to our company, but has also created opportunities for organized theft groups to impact our operations. We continue to deploy enhancements to our system to increase the security of our platform and have become much more stringent on carrier vetting to mitigate cargo theft risk, which continues to be very prevalent in the industry, and in particular for our customers who are feeling the impact. Long-term, technology investments will continue to drive productivity and efficiency gains across the board and better position us for long-term growth with our customers. That concludes my comments, so I'll turn it back to the operator, who will open the call for questions. Thank you. We will now begin the question-and-answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one a second time. If you are called upon to ask your question and are listening via speakerphone on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. In order to take as many questions as possible, we do ask that you please limit yourself to one question. Again, it is star one if you would like to join the queue. Your first question comes from the line of John Chappell with Evercore ISI. Your line is open. Thank you. Good afternoon. Darren, you mentioned a pickup near the end of June on some of the volumes. Just wondering, does that have to do with some of the themes that Spencer spoke about regarding maybe moving up, peak season a little bit? Or is there something else going on, particularly in the Transcon in Southern California, that gives you a little bit more optimism about the cycle? Yeah, appreciate the question. Certainly, Spencer's comments just on overall imports through Southern California is one of many factors resulting in just a general improving trends throughout that second quarter. I do want to highlight, you know, we referenced a negative 1% volume comp in June. June of 2023 had 2 more working days than June of 2024, and so that's certainly an influencer in that comparison. But again, as the quarter went on, we experienced some improving trends from our customers. I also highlighted in the prepared comments that we were up double digits out of Southern California for the entirety of the second quarter. So certainly, some customers would highlight that maybe that was a result of early shipments for peak season. Some customers highlighted that generally their business had improved, and in some cases, we had converted back highway business to intermodal. So it's kind of a mash of everything, to see some improvements that occurred during the quarter. Yeah, and hey, John, this is Spencer. I'd just like to add a little bit to that. When I talk about normal seasonal trends, I think that's something that we really need to think about across our customer base. Normal seasonal trends, end of month, end of quarter in Q2, really are related to back to school, things that are prepping for that season, for other events that take place here in July with different promotional things. So, I'm encouraged from our customer base that really normal seasonality started to show up for us, and I think that's something that we're going to be looking forward to as we move on. I think that in the prior years, we struggled really with seeing seasonal trends in a normal way. There was just still so much disruption. So, appreciate the question. Just wanted to add those comments. Your next question comes from the line of Jordan Alliger with Goldman Sachs. Your line is open. Yeah. Hi, afternoon. So just... I know you've talked about this a bunch before, the intermodal margin recovery story. I know you have the excess capacity now, but is it mostly a function of getting sequential revenue per load to move up? And do you feel, given now that the contract season is largely done, for the next several quarters, at least looking ahead, do you feel you've reached a point of stability on that revenue per load? Thanks. Well, certainly, we highlighted that this current, what I'll call the 2024 bid cycle, largely completed during the second quarter. Those prices and, and the yields that we achieved were not strong enough to give us margin improvement that, that we believe our system can and should run. We're not changing our long-term margin target. We're, we're not satisfied with the current returns on our business and, and do recognize that pricing improvement is, is one of a couple of areas, but the most important area in order to get margin improvement. Certainly, volume is worth more to us today than ever before. We've said that quite often, and that's just a result of having as much underutilized equipment as, as we currently have. And then all things cost. You know, what can we do to be more efficient as an organization? That can be inside the activities of our drivers and our drayage operation. That can be certainly inside the activities of our people. How do we utilize technology better? How can we just be more efficient with, with our customers? But over the long term, pricing will always be the most valuable element to improving margins, more than volume or just operational efficiency, but we will work on all three every day. Your next question comes from the line of Chris Wetherbee with Wells Fargo. Your line is open. Hey, thanks. Good afternoon, guys. I guess I wanted to touch a little bit on that margin comment. I guess we saw volume up sequentially, and I know yields were going down, but we also saw profit down sequentially. So I guess, you know, from a seasonal perspective, that doesn't necessarily always show up. So I guess I just wanna make sure I understand from a cost perspective, if there was something incrementally you were dealing with this quarter, if it's the kind of thing that we see improvement in volume from here, should we be able to see margin or operating profit improvement sequentially from here? It's really a pricing implementation element is probably the largest driving factor behind the non-normal seasonal sequential change in profitability. Certainly, the implementation of the bid cycle has been a headwind to seeing earnings improve. We will say it often, volume will be our leading indicator, and pricing will always lag volume. So as we find our way through the rest of the year and look for opportunities to grow our business, we believe over the long term, certainly pricing improvements will lag that volume. Your next question comes from the line of Scott Group with Wolfe Research. Your line is open. Hey, thanks. Afternoon. So I know you don't like to give too much in the way of quarterly guidance, but maybe it'd just be helpful to get expectations in a reasonable place at some point. But so as we see the full impact of these bids, Darren, do you think we should expect one more quarter of sort of a sequential step down in rev per load and margin? So that's, like, near term, and then just longer term, bigger picture, right? In prior downturns, we've seen you guys take share, and that really sets you up for the next cycle of earnings growth going forward. We're not seeing that this time, and I guess I'm wondering if you have thoughts on why and if you think that... if we should-- what implications you think that has for the next upcycle. So listen, Scott, there's a lot in your question there. Certainly, the bid cycle has always implemented at the same cadence that it did this year. We implement portions, big, big chunks, 30%, call it, of this pricing cycle throughout the second quarter. So I guess you could expect that something after the second quarter would entail all of that fully implemented. So over time, I mean, that... We did have negative pricing pressure. I don't have any guidance for you in terms of big step downs. There's certainly, I don't anticipate anything like that, but we're certainly getting everything fully implemented throughout the second quarter, and so the third quarter is a better reflection of the fully implemented pricing cycle. In terms of share gains, I mean, we have, I think we are dominating the Transcon, Transcon marketplace. I do believe our volume growth there has been substantial, and we've highlighted that. In the East, we have some significant headwinds from truckload pricing. I think that as we get into the second half of this year, we are optimistic about the discussions we're having with our customers, about the value proposition that we represent, as well as concerns about highway capacity, and we will continue to look to grow. So that's probably all I have to comment on your questions today. Your next question comes from Daniel Imbro with Stephens. Your line is open. ... Yeah. Hey, good evening, guys. Thanks for taking our questions. Maybe one shifting to the dedicated side. Nick, we continue to hear anecdotes of a competitive dedicated market. Dedicated margins were a bit softer, kind of underperformed seasonality, and you sold a few hundred more trucks. I guess, with 1,000 trucks sold in the first half, should those startup costs start to moderate as you move through the summer with that business online, where we start to see, you know, margin inflection as that rolls off? Or how would you think about that business as we move through the summer? Yeah. Well, first, thanks, Daniel, for the question. First, from startup costs, I would say we're just starting to see some of those startup costs come in. We had a pretty good chunk that's starting this month in July, and so you're going to see that a little bit in Q3, but that's a good thing for us. From a competitive standpoint, I would just say from our model and what we go after, we've been very disciplined in that. And so we've seen some competitiveness in retail, in what I would call the basic retail replenishment, is where we've seen most of our stiff competition, a little bit more aggressive pricing from some of the one-way truck models or quasi-dedicated in that segment. But in the other, I would just tell you, our pipeline, as I said, is very solid, and you've seen the numbers that we've sold. So we think we still have a very good footing on what we're going to sell. We're just facing a little bit of pressure in some of those retail areas. Daniel, hey, I'll... This is Brad Delco. I'll add a little bit more to that, too, just to clarify, some things that were in some of Nick's prepared comments. You know, he did share he expected the ending fleet count for the year to be similar to what we saw in Q2. But how we really get there is, you know, we do have visibility to some fleet losses for the remainder of the year. So think of losing trucks that are sort of at their mature state, if you will, and at the same time, we have startups that are going to occur in Q3 and Q4, and obviously, those startups have a little bit of headwind to them on the margin side. So we wanted to give a little bit more clarity on that, and that was our, the comments we had in our prepared remarks were an attempt to sort of give you guys a little bit of forward guidance on that expectation going forward. Your next question comes from Ken Hoexter with Bank of America. Your line is open. Hey, good afternoon. So I want to delve into kind of some of the discussion that your Transcon growth was up 5%. You know, you talked about double digits from the West Coast ports, but they were seeing kind of mid-teens volume growth. Kind of some conflicting statements. So you noted early peak season hitting shores, but some of that has yet to move. So I just want to understand, are we building inventories? Are we seeing share loss to other rails that are now being more variable on rates, you know, for some of the peers that used to be on Burlington with you? I want to understand kind of the market dynamics in there, if you can. I would fully expect to outperform the domestic market on Southern California eastbound volume, so I don't believe we're losing share to any other domestic intermodal channel. Now, in terms of during the pandemic window, so if I go back to 2020 through 2023, there was an uptick in the share of transload or domestic volume as a percentage of the imported goods through the Southern California or West Coast gateways, and that deteriorated so far in 2024. It's hard to say what's happened with that cargo. I don't believe it has moved domestically, intermodally. I do believe that the share of intact international intermodal is up slightly. Maybe that's because it converted from the East Coast to the West Coast, and on the East Coast, it was intact, and it still is today, even though it's routing through the West Coast. We're constantly communicating with our customers, trying to learn more about what's happened with the mix of transload versus intact international. Is some of that import cargo moving into storage and will ship later? That's a reasonable question. I don't have a great answer for you on it, other than I'm confident that we're maintaining and growing our share of eastbound domestic intermodal volumes from the West Coast. In terms of why the imports are as strong as they are and that, and we're not necessarily keeping up with that, I don't know. We did highlight that our Southern California volumes were up double digits. I didn't tell you how many double digits. I just said double digits. So, we feel good about our pipeline for eastbound California business, and we will continue to look to grow there and all other markets. Your next question comes from the line of Ravi Shanker with Morgan Stanley. Your line is open. Great. Good afternoon, everyone. Just shifting gears a little bit to talk about, ICS. Can you just unpack the kind of, volume shift, the year-over-year volume, 25%, a little bit more, kind of to give us a better understanding of what is going on there? I think you alluded to, the BNSF business that you bought kind of, being not quite what you expected. Can you elaborate on that a little bit more as well? Thank you. Yeah, Ravi, thanks for the question. You know, it's been an incredibly difficult and competitive market. That's certainly been a factor. As we've stated in previous quarters, we've been focused largely on quality. ... and that's also weighed in on some of our volume losses. And in the commentary in my prepared remarks, I made reference to the impact of some of the challenges that we've had on the BNSF acquisition. And so really what we see there is that we lost some business shortly after acquiring the brokerage assets of BNSF Logistics that were unexpected. We've also accelerated, and I'm happy to say that we have been largely successful at integrating from a technology, but that came with some incremental costs in the first half. And so that's also weighed us down. You know, when we think about the bigger picture and where our focus has been, there's no doubt that we're dissatisfied with our performance in ICS. I am, however, encouraged at what we saw, and Spencer referenced it kind of on the seasonal trends, and I think even Darren mentioned what they saw in their business. We saw something very similar, both not only in ICS, but also at JBT. When we really think about breaking down the second quarter month by month, and we saw a really good step forward from our May volumes into our June volumes on a workday basis. And so, you know, I feel like we saw a step up greater than what we historically would see, and I do believe that in part, that is our strategy starting to take form on growing back with quality partners, quality customers, and quality carriers. Again, can't quite see it fully in our results yet, but we took a nice step forward on our volumes. Your next question comes from the line of Jason Seidel with TD Cowen. Your line is open. Thank you, operator. I want to get back a little bit to the intermodal side on the margins. How should we think about some of your commentary about lower utilization and increased costs related to equipment? Is, is that coming from the Walmart assets, and how should I think about that sequentially? You know, Jason, I mean, the acquisition of the Walmart equipment is, hasn't really, isn't fully inside our results at this point. So, I mean, we have more J.B. Hunt equipment, whether it's Walmart or our own, than what we're fully utilizing today. And so we have significant growth capacity. In previous quarterly calls, I have said where we were able to handle as much as 20% more than what we are, and that certainly remains true today. So what on the margin front, we have significant leverage to gain by adding volume and putting that equipment to work. But again, we also have negative pricing pressure at the current moment, which is also a headwind, obviously, to margin performance. You know, hey, relative to our industry, I think we're doing okay in that area. But certainly we have an awful lot of work to do, moving forward to get back to the returns we expect for our shareholders. Your next question comes from the line of Tom Wadewitz with UBS. Your line is open. Yeah, good afternoon. So I wanted to ask you a little bit more about how we think about year-over-year volume growth in intermodal in the second half. You did have some traction on volumes in 3Q, I think even more so in 4Q last year. So do you think we should be thinking about kind of worse year-over-year performance, or are there, you know, as the comps get tougher? Or do you have some visibility, maybe to some momentum or, you know, Walmart loads coming in that would help you to kinda stay, you know, flattish on the year-over-year? Thank you. Well, I think as much as anything, and I'm gonna ask Spencer to maybe jump in here, when I'm done. Just our, as we moved through the second quarter, we were feeling momentum, and we, we've kinda tried to highlight that. We do feel like our customers are aware that last year, they kinda caught us by surprise with some of that volume, and everyone is aware that surprises are not always best when it comes to an efficient transportation network. So we're engaged in conversations with all of our customers. We have capacity to solve their needs, and we'll look for ways to continue to grow our business, both sequentially and year-over-year will always be our goal. We'll have to wait and see, but certainly, we have felt some momentum as the second quarter went on. Yes, Darren, I'll just share a few things. Tom, thanks for the question. You know, we appreciate every customer with that we have and all the conversations we have. One of the things as we look forward, you know, they are talking about their peak season plans. But, you know, when we ask for our customers' forecast, that's an area they still struggle with. They struggled in the past, they struggle today, and we really lean into our team, leveraging our data, sharing our expectations, and really collaborate with our customers from here to try to understand what they need and how we can set our ops teams up to serve them well. You know, if we look at the end of the month and the end of the quarter, I don't think that, two weeks is gonna make a trend, or two months. You know, what we need to do is get actual data from our customers and their expectations on what they anticipate their demand is gonna be, and then really set ourselves up to serve them well. And that's really what we're focused on right now. ... and looking forward to working with them to do that. Your next question comes from the line of Bascome Majors with Susquehanna. Your line is open. Yeah, following up on the comments you just made about peak season, you know, if we look, the fourth quarter, you typically do see some sequential profit improvement, you—big holiday lift in Final Mile, you know, some in Intermodal ICS and Truckload, and maybe a more mixed performance in Dedicated. But just high level, can you talk about the fundamental conditions that separate a normal to good peak season at Hunt from a disappointing one on the bottom line? And just when would you have typically the customer conversations that would give you good visibility into how that peak season will actually play out? Thank you. Hey, Bascome, thanks for the question. This is Shelley. You know, I think Spencer did a nice job highlighting that we are having those conversations with our customers. I would tell you, this is normally the time that we would be having those, and I think you heard Darren highlight that we're encouraged with more seasonal demand, similar to what we've seen pre-pandemic. So I would tell you, this looks and feels more like pre-2020. This would be consistent with how we had conversations with customers in the past. I think our customers have done a better job on their bid compliance and understanding their volume better. I think we're all just a little bit hesitant. You know, we've had some false starts over the last couple of years, and we just want to make sure that things are steady and that we can see clear line of sight. I think our customers are even a little bit skittish about what they can expect. So third and fourth quarter, you know, last year, they did catch us by surprise. We did an outstanding job. Us, our railroad providers, I would say across the board, we did a great job servicing our customers. Our customers realize that. Now, that's why we're having those conversations. What is the plan? How do we think about that? Certainly, if we move back to a more seasonal pattern, you know, we would expect those same things to occur from a demand perspective and from a profitability perspective. Your next question comes from the line of Brandon Oglenski with Barclays. Your line is open. Hey, good afternoon, and thanks for taking the question. Shelley, maybe if we can follow up from there, and welcome to the hot seat as CEO, but this is the seventh quarter of material operating income declines for you guys. I mean, do shareowners just, at this point, need to wait for an inflection in the market, or is there more that you can do from your position? I mean, I know we talk about highway conversions, but if we look back six or seven years, intermodal volumes really haven't changed all that much in your business. It's the sixth consecutive quarter of, you know, pretty material losses at ICS. So what can you do in the interim to change outcomes in your business without, you know, the market maybe potentially inflecting better for you? Yeah. Thank you, Brandon. Appreciate the comments. You know, certainly our last two years has been the most difficult time in my thirty-year career. It's been the most difficult time in predicting and understanding where our customers are headed and, and how we need to think about that from a quarter-to-quarter basis. But we are very focused on long-term. One thing we did learn from the pandemic was we weren't prepared and ready for our customers, and that was to the detriment of our long-term success. We have made strategic decisions to invest in our people, our technology, and our capacity to be prepared and ready. I believe our customers know that and think that. I will tell you some of the things that you've heard from the businesses, today and even in our past, we are preparing ourselves with best-in-class service. That, for us, means we want to separate the service levels we're giving our customers, so they know they can expect that from J.B. Hunt on a consistent basis, and then creating more value for our customers. You know, we do look at it long term, and we also recognize that we have to deliver long-term returns for our shareholders. We think this is the best strategy that sets us up for that long term. I think in our conversations with customers today, we're encouraged with some of the comments that they're making towards us in the areas that we're heavily focused on. And so I would tell you, ICS, we're not pleased with performance in ICS. We're not pleased with our performance, I would say, to our expectations, but our relative performance has been pretty good. That doesn't mean that we're happy. But when I look at where we're at relative to the competition and how we are doing from a market share gain, a profitability perspective, our return profile, those three areas, we're making progress, and that's what we're going to continue to focus on. You know, I will say this: as we've moved here into second quarter and moving here into third quarter, you know, one thing we do know is we're at least closer to calling some kind of inflection. Not that we're calling it today, but I will say there are signs that tell us that things are moderating or getting better. We are skittish. I've been conditioned now over the last two years to be very cautious on the things that we say, and I, I think you're hearing a tone that says, "Listen, we have better signals." It doesn't mean that they're great, and we need more information from our customers to get us better. Today is the time for us to make sure that we're close to our customers, that we're prepared and ready. But I will tell you, we are not changing our targets. We have a long-term goal across all of our businesses to make sure we deliver appropriate returns to our shareholders. That will be our focus. We think we're taking the best strategic decision and move to make sure that we accomplish that. Your next question comes from the line of Jeff Kauffman with Vertical Research Partners. Your line is open. ... Thank you very much, and congratulations, Shelley. I guess I just want to think about this bigger picture because this downturn, I think, surprised everybody in terms of the magnitude and the duration. And, you know, here we are still seeing pricing trends coming in weaker than expected. You know, even though volume feels a little bit more seasonal, there's no real view of any catalyst for acceleration. I guess, looking back on this, you know, what do you think we got wrong about the magnitude of this turn? And, you know, what do you think it takes to catalyze us back forward on the volume and pricing side? Well, thank you, Jeff. Good question. You know, I will say, I think one of the things that we didn't understand, same thing we didn't understand going through the pandemic, was how much the change would occur. And so if I look back on our experience, in 2009, we had the Great Recession. We understood, and we were prepared and ready. One of the changes, though, that happened then, as price went downwards during the, that Great Recession, so did our cost. We're in an inflationary cost perspective with price pressure coming down, and those two things really is the first time I've seen that, at least in my history, inside the organization. I don't know that anybody believed those two things would occur as they have. You know, you typically look at history, try to learn from what you know there, and then make sure you're prepared and ready. That, I would say, was more of a disconnect than maybe what we expected. And then just the depth. One of the things that we've used in our history is what's happened with capacity. And so we've estimated that carriers are losing money for now, greater than two years. That is unusual. It's unusual from our history. That typically would mean that capacity would come out of the market, and that we would start the recovery. That has not happened, and I think that's been the biggest myth of this last two years of a freight recession. We, we haven't been able to predict when capacity will leave the market, and we know that that has to occur, or demand has to pick up greater. But I would tell you, more likelihood that, that the capacity side would exit more quickly than demand would increase, even more. So I would say those are the two things. I'm going to ask the team if there's anything else that they see, but those would be kind of the two things I would say that we... If we'd known better, we probably could have thought through a few things. Your final question comes from the line of David Vernon with Bernstein. Your line is open. Hey, good afternoon, guys, and thanks for being here. I just wanted to ask a question about within the intermodal service. You know, can you give us some context or color around how the Quantum product is performing that you guys announced a little while ago? And then with the shift over of the Mexican traffic from the KCS de Mexico to the FXE, I'm just wondering if you could just give us an update on how that transition's going. Has there been any impact on customer attrition or anything like that in the North-South trade? Thank you. Sure. So Quantum, we're absolutely thrilled with the service performance. I think we're actually outpacing even expectations of our customers. Now, that being said, the complexity of the networks and the decision point for a shipper to convert highway business that we would call, you know, cannot fail, the kind of highway business that's not just inventory replenishment, it's a business-to-business transaction kind of move, has probably been a little more complicated and a little slower than what we have anticipated. So while our volume benefits from the Quantum program have not yet been achieved, we're absolutely encouraged by what we're experiencing with the service, the feedback from the customers that are, utilizing that service, and we're growing it every day. It hasn't grown as fast as we probably would have anticipated, but we've got a very long runway of opportunity to grow with the Quantum product, and we're thrilled with that. As it relates to the announcement about the transition to Ferromex from CPKC at the beginning of the year, I think the transition was successful. Again, customers are clearly concerned about a transition like that, and maybe not everybody on day one converted with us at the pace that we would have probably liked to have seen that happen. As the year has gone on, we have had a lot of success at going and recovering business that maybe didn't transition with us. And, hey, our volume swing on the Ferromex was a material change in their network, and the BNSF's ability to serve Eagle Pass has been excellent. So we feel good about all three parties involved in that program. But certainly, the customer education around customs and all things related to the new terminals that we operate at with Ferromex was an education, and that, that has taken a little longer and probably didn't result in quite as much transition to our network immediately. But again, as the year's gone on, I feel good about where we're at today, and there's more work to be done to grow our presence in Mexico as the year moves on. That concludes our question-and-answer session. I will now turn the conference back to Ms. Shelley Simpson for closing remarks. Thank you, and thanks for joining our call. You've heard us talk about our challenges in the business, and although we're pleased with the relative performance, we're not pleased with our own expectations. We've seen pressure from our customers, our costs in all of our businesses. Pricing has largely been reset through bid season for our transactional businesses in Intermodal, ICS, and JBT, and that pricing will largely be in place until we complete bid season midway through 2025. During this freight recession, we've invested in our foundations of our people and our technology and our capacity, and that's really been preparing for our long-term opportunity to grow with our customers, and we're encouraged in a few areas. Our DCS and Final Mile businesses have fared very well in this recession. I am pleased with the margin performance and the resiliency of our DCS business and the improvement in our Final Mile business on both profit and returns. Our customer demand is returning back to something more seasonal that we can be better at predicting to pre-pandemic levels, and that gives us more confidence as we're looking at bid compliance better between 80% and 90% in both Intermodal and JBT. And that means our customers are doing a better job predicting their consistent volumes. We're also encouraged with our pipeline and the conversations we're having with customers around our growth plan and our peak planning. And finally, very pleased with our people. There's 33,000 of our people working hard every day to deliver on the expectations of our customers and our shareholders. We're going to continue to focus on controlling our costs. We will provide best-in-class service, we're going to maintain our excellence in safety, and we'll create value for customers. And that's what sets us up for growth. That scales our investments, and it allows us to create long-term value for our people and our shareholders. Thank you for your comments and your interest on the call. We look forward to speaking with you next quarter. Ladies and gentlemen, this concludes today's call, and we thank you for your participation. You may now disconnect.