Good afternoon, ladies and gentlemen. My name is Colin. I'll be your conference operator today. At this time, I'd like to welcome everyone to the Knight-Swift Transportation third quarter 2022 earnings call. All lines have been placed on mute to prevent any background noise. If at any time during this call you require immediate assistance, please press star zero for the operator. Mr. Miller, the meeting is now yours. Thank you, Colin, and good afternoon, everyone, and thank you for joining our third quarter 2022 earnings call. Today we plan to discuss topics related to the results of the third quarter, provide an update on current market conditions, and update our full year 2022 guidance. We have slides to accompany this call, which are posted on our investor website. Our call is scheduled to go until 5:30 P.M. Eastern Time. Following our commentary, we will answer questions related to these topics. In order to get to as many participants as possible, we're going to limit the questions to one per participant. If you have a second question, please feel free to get back in the queue. We'll answer as many questions as time allows. If we're not able to get to your question due to time restrictions, you may call 602-606-6349. To begin, I'll first refer you to the disclosures on page 2 of the presentation and note the following. This conference call and presentation may contain forward-looking statements made by the company that involve risks, assumptions, and uncertainties that are difficult to predict. Investors are directed to the information contained in Item 1A, Risk Factors, or Part One of the company's annual report on Form 10-K filed with the U.S. SEC for a discussion of the risks that may affect the company's future operating results. Actual results may differ. Now on to slide 3. The charts on slide 3 compare our consolidated third quarter revenue and earnings results on a year-over-year basis. Revenue excluding fuel surcharge grew by 9.2%, while our adjusted operating income declined by 1.4%. GAAP earnings per share, per diluted share for the third quarter of 2022 were $1.21, and our adjusted EPS came in at $1.27. On a year-over-year basis, higher interest expense, lower gain on sale, and a higher tax rate impacted adjusted EPS by approximately $0.10 per share. Now let's move to the next slide. Slide four illustrates the revenue and adjusted operating income for the third quarter and year-to-date periods in each of our segments. Despite a change in freight market, our performance remained strong across each of our segments. Our truckload segment operated in the low 80s, while logistics continued to generate mid-teens margins. Intermodal continues to make year-over-year improvements, and our LTL segment is outperforming the targets we set at the time of acquisition. We remain focused on continuing to diversify our business and develop complementary services that bring strategic value to our customers and partner carriers. The chart on the right highlights the percentage of revenue during the third quarter of 2022 from each of our four segments, as well as the percentage of revenue from our other services, which include our rapidly growing insurance, equipment maintenance, equipment leasing, and warehousing services. We believe this diversification positions our company to successfully navigate what could be a more challenging freight environment in the coming quarters. We are encouraged with how well our different brands and services continue to collaborate to find new opportunities to grow with existing customers and forge relationships with new customers. Our company is made up of unique brands that have different strengths and provide different services throughout the supply chain. We bring creative solutions with scale to solve difficult challenges. We value vertical accountability for performance in each business, but also horizontal collaboration across our brands to optimize and fully leverage our capabilities. Because of this structure and the leaders we have on our team, we feel well positioned to successfully navigate the changing market. The next few slides will discuss each segment's operating performance, starting with truckload on slide 5. On a year-over-year basis, our truckload revenue, excluding fuel surcharge, grew 3.7%, while our operating income declined 14.9% as we operated with an 81.8% adjusted operating ratio. During the quarter, revenue per tractor grew 1.8%, driven by an 8.1% increase in revenue per loaded mile and a 4.2% decrease in miles per tractor. The improvement in revenue per tractor was more than offset by inflationary pressures across our business. Most notably, we continue to see cost pressures in driver-related expenses, equipment cost and maintenance, and insurance. Within our truckload segment, we adjust to market conditions and have a diverse group of brands and services, including nearly 5,000 dedicated trucks, which provides us with some flexibility and strategy. For example, as over-the-road truckload volumes have become less robust year-over-year, our dedicated business has grown top line revenue and improved margins on a year-over-year basis. Freight demand trended below typical seasonal patterns in the back half of the third quarter, and these trends have continued into October. Given these trends, we are expecting a muted peak season this year. Spot opportunities have declined significantly, and we have been pivoting towards making more commitments through the bid season to reduce our exposure in the spot market. We've been doing this since the beginning of the year. Small carriers who typically have significant spot exposure are now dealing with depressed rates, higher fuel prices, higher fixed equipment costs, rising insurance costs, and now elevated interest rates that will most likely continue to rise. These factors have led to capacity attrition that we are currently seeing and will most likely accelerate the attrition in coming quarters. Despite the changing market, our customers still value trailer pool capacity at scale, and we see this demand in both our truckload and logistics segments. We continue to invest in our already industry-leading trailer fleet, which grew sequentially to just over 75,000 trailers. We believe our scale in trailers is a competitive advantage that provides our customers capabilities that are extremely difficult to replicate. Now let's move to slide 6. Our LTL segment continues to perform well and is exceeding the goals we set at the time of acquisition. For the quarter, revenue excluding fuel surcharge was $224 million, and we operated at an 84.5% adjusted operating ratio. This represents a 300 basis point improvement from the third quarter last year, which was the first quarter that we included AAA Cooper in our results. Volumes followed normal seasonal trends while pricing remained strong. Our revenue, excluding fuel surcharge per ton of weight, increased 15.5% year-over-year. We have been extremely impressed with the leadership at both AAA Cooper and MME as we work towards merging our systems this quarter to create seamless connectivity for our customers while maintaining the culture and brands of each company. We believe this positions us to provide additional services to existing customers, as well as create new customer relationships. Our Knight and Swift brands have deep relationships with large shippers, who in many cases deal with larger LTL network or larger LTL providers. Creating a super-regional network in the short term and then a national network in the long term will enable us to find opportunities to further support our existing truckload customers with LTL capacity. We also believe this approach is very welcoming to other LTL companies who may choose to join this network. Again, we are very encouraged by the LTL results, and our conviction for synergy achievement continues to grow. Now let's move to slide seven. Our logistics segment continues to grow volume, with load count up 20.1% year-over-year. As compared to the third quarter of 2021, revenue was down just 5.2%, despite a 21% decrease in revenue per load. Gross margin also expanded to 20.9% in the quarter compared to 18.1% last year, leading to an 86.8% adjusted operating ratio. This resulted in a slight improvement in operating income compared to the same quarter last year. Our customers continue to value the power-only services we provide, which led to a 33.3% growth in power-only load volumes. Our vast and growing trailer network allows our customers the ability to optimize their warehouse space and labor costs. Third-party carriers prefer power-only business because it saves on hours at each load and unload location. It lowers their capital investment and risk, reduces their operating costs, and gives them access to freight they historically wouldn't be able to participate in. We continue to be excited about this business and have several technology initiatives ongoing that will improve the experience for our third-party carriers, as well as provide more seamless information internally and to our customers that will lead to more opportunities to utilize our equipment. Network fluidity and chassis availability remains a challenge within our network. However, we have made progress through the peak season to better align our freight network and our rail partners in both the West and the East. Our goal is to continue to grow intermodal through improved dock turns as well as expanded capacity as we added approximately 650 containers during the third quarter this year. I'll now turn it over to Dave. Okay, thanks, Adam. Good afternoon, everybody. Slide nine illustrates the growth in our businesses that are included in the non-reportable segment. For the quarter, we had a 56% increase in revenue and a 97% increase in operating income. These increases in revenue and earnings are from our overall strategy to develop essential services for third-party carriers. As outlined last quarter, the three primary objectives in these carrier services are, number one, to introduce new profitable revenue streams with growth potential that further diversify our company. Second, to leverage existing expertise in areas where we've proven industry-leading results such as risk management, maintaining equipment and purchasing. Three, provide these services in a way that benefits the relationships we have with small carriers as we build a much larger network using their power with our trailers and freight network. Many of these services are branded under our Iron Truck Services brand. We found tremendous interest in our offerings from small third-party carriers interested in purchasing insurance, maintaining their equipment in our nationwide shop network, leasing equipment, and leveraging our buying power to purchase fuel. These new and expanded services, along with warehousing and equipment leasing, have nearly quadrupled revenue and are on pace to generate over $500 million of revenue this year, with projected operating income in excess of $60 million, compared to a loss of $68 million in 2019. Now to Slide 10. This slide illustrates the progress of the intentional changing of the composition of our business into an industrial growth company. The chart on the left shows the percentage of adjusted operating income from each of our segments and our other non-reportable services since the Knight-Swift merger in 2017 through the third quarter of 2022. We're pleased to report meaningful contributions and earnings from each area over the last five years. These diversification efforts make us less volatile, a less volatile company that we expect will help us mitigate the downside through truckload freight cycles. Our truckload earnings now represent only 63% of earnings, which represents a meaningful shift from where we were in 2017, immediately following the Knight-Swift merger. This reduction in our truckload earnings percentage has changed, while at the same time significantly improving our truckload earnings from a 2017 full year combined pro forma Knight and Swift earnings of $319 million to $840 million for the third quarter trailing twelve months of this year. The chart on the right shows our rolling four-quarter adjusted earnings per share since the Knight and Swift merger. During this time, EPS has moved from $2.16 per share to $5.64 per share for the trailing twelve months. Moving to Slide 11. Strong earnings have driven increases in our free cash flow, which was $1 billion through the third quarter over the trailing twelve months. Year to date, we've used cash to increase our dividend to shareholders by 20%, repurchased $300 million worth of shares, and paid down $396 million in long-term debt and leases. Since the 2017 Knight-Swift merger, we've invested $1.6 billion in acquisitions. Making acquisitions remains a high priority, and our strong cash flow generation provides us with ample capacity for M&A opportunities. Our balance sheet is strong, and we are well positioned to invest in organic growth, pursue acquisitions, purchase more shares, increase dividends, and/or pay down debt. We are constantly evaluating market conditions to maximize our use of cash to create value for our shareholders. On to Slide 12. Return on Net Tangible Assets remains a key metric for us. Over the past twelve months, we've achieved a 22.4% return on net tangible assets, which you can see from the graph is a substantial improvement from where we've been in the past few years. Our goal is to improve this metric by focusing on three key areas. One, growing our less asset-intensive businesses. Two, acquiring and improving businesses. And three, expanding margins in existing operations. During the third quarter, we made significant progress in many of these areas. In our less asset-intensive businesses, we saw 20% increases in load volumes for our logistics business, with a large part of those coming from our power-only service offering. We saw warehousing revenue increase over 60% year-over-year, and our Iron Truck Services revenue increase over 140% year-over-year. We've experienced synergies and improvement in every business we've acquired, be they warehousing, asset truckload, of course, less than truckload or truckload brokerage. In less than truckload or LTL, we're expanding our network in the fourth quarter with the addition of four new terminals and over 125 doors. We believe our focus in these three key objectives leverage our core competencies in areas of opportunity that are unique to us will allow us to continue to generate significant returns to our shareholders over time. Now on to the next slide, Slide 13. I'm gonna take just a moment and give a little bit of background and kind of view into the market as we see it. Bear with me as I kind of walk through this. I won't hit each one of those bullet points, but I'll try and kind of, I'll cover them one way or another, but just give some commentary here on what we're seeing in the market. We've been preparing for the next freight downturn since before the last one. When we saw the unexpected disruption from COVID-19 in the April or May timeframe of 2020, we quickly jumped into action, made immediate changes to adapt and to perform. The changing freight market from the all-time high demand experienced, that started really in the summer of 2020 and continued into a more typical seasonal demand, which we started to see at the beginning of this year. Now in some ways, we're seeing sub-seasonal demand as we come towards the end of 2022 and then head into 2023 has been a little easier to anticipate, predict, and even prepare for than what we originally saw back at the start of COVID-19. Now, although we've been hoping that this strength would continue over the last year, we've followed our playbook in preparing for the economy and the truckload market to slow. We reduced our exposure to the spot market at the beginning of the year and have made certain cost adjustments throughout the year. Mitigating the volatility associated with the full truckload market has long been a major focus for our company and something we frequently talk about with investors. Major part of the rationale for our entrance into the LTL market was the reduced volatility in the LTL market, which has considerably high barriers to entry and has performed with remarkable consistency over the last two decades. It used to be that a truckload carrier's only real option for mitigating cyclicality was to increase the percentage of their business that's dedicated as opposed to regular route. Our industry-leading OR and size have afforded us a meaningful cash flow to invest in related but less cyclical industries such as LTL or insurance or maintenance, and maybe more, even more impactful to increase our already industry-leading largest trailer fleet, but to continue to increase that to create more value and reduce volatility with increased trailer pool business with our truckload customers by providing the truck and driver to power from one of our partner carriers of our massive portfolio of third-party carrier relationships. The ability to provide access to concentrations of trailers in all 48 states is unique to us. It maximizes supply chain efficiencies, has a very high barrier to entry, and we operate trailers at what may very well be the industry's lowest operating cost per mile. These trailer pools offer customers flexibility in loading and unloading trailers based on their labor availability, as opposed to unloading or loading when the truck arrives and the driver is waiting. Since the electronic log mandate nearly four years ago, most loads accrue additional charges to the shipper if not unloaded in two hours when a driver is waiting. The flexibility from our pools to unload in a day or two creates value and helps our contract rates and awards for both our own trucks and the loads that we secure for partner carriers. These challenges, there are massive challenges facing small carriers today, and they are unprecedented, and we expect they will further intensify and result in further rationalization of industry capacity or supply. Similar to 2019, we expect that this will be a tale of two cities with shorter-term challenges for the well-capitalized, highly profitable carriers versus those already challenged in what has been a very strong freight market. We expect meaningful, attractive acquisition opportunities over the next few quarters. I'll now turn it to Adam to finish up with our guidance slide. Thank you, Dave. We'll turn to slide 14, which outlines our guidance for the full year 2022. We now expect full year 2022 adjusted EPS to be within the range of $5.17 to $5.22, which is down from our previous quarter's guidance of $5.20 to $5.40, which reflects the performance of the third quarter and our expectation for fourth quarter. For the fourth quarter, we expect a muted seasonal freight environment combined with significantly fewer spot market opportunities. This is expected to cause rates to turn negative on a year-over-year basis. Keep in mind that this is a result of a more difficult comparison than rates meaningfully declining sequentially. We continue to see, or we continue to increase the number of seated trucks. As a result, our year-over-year change in miles per tractor has improved each quarter in 2022. We expect the year-over-year deficit in miles per tractor will improve in the fourth quarter as our truck count remains stable. Miles per tractor typically declines sequentially from third to fourth quarter due to holiday disruptions. Normally, we would have significant spot opportunities in process that more than offset the decline in productivity. Absent these opportunities, we expect our adjusted EPS to be lower in the fourth quarter than in the third quarter. We expect our LTL business to improve both revenue and margin year over year, but Q4 will follow typical seasonal patterns in LTL with the fourth quarter not being as strong as Q3. Logistics load volumes and revenue per load are expected to be consistent with Q3, with an operating ratio in the mid- to high 80s. Intermodal margins to remain in the high single digits% with volume improving on a year-over-year basis. We expect other revenue and income to grow in comparison to prior year, as we've outlined in slide nine of this presentation. We continue to expect inflationary pressures from driver expenses, maintenance, equipment, and non-driver labor will continue to be inflationary as well. We expect total gain on sale of equipment to range between $10 million-$15 million in Q4 as the used equipment market continues to moderate. Due to rising interest rates, interest expense will continue to increase. Our net CapEx or net cash CapEx for the full year, we expect that to be $525 million-$575 million for this year, and our tax rate is expected to stay around 25% for the year. These estimates represent management's best estimates based on current information available. Actual results may differ materially from these estimates. We would refer you to the risk factor section of the company's annual report for a discussion of the risks that may affect results. This now concludes our prepared remarks. We'd like to remind you that this call will end at 5:30 P.M. Eastern. We will answer as many questions as time allows. Again, please keep it to one question. If we're not able to get to your question due to time constraints, please call 602-606-6349 and we'll do our best to follow up promptly. That concludes our prepared remarks. We will now entertain questions. Tom? Thank you. At this time, I'd like to remind everyone, in order to ask a question, please press star followed by one on your telephone keypad. Again, this is star, followed by one on your telephone keypad. We'll pause for just a moment while we compile the Q&A roster. Okay. Your first question is going to come from Todd, please go ahead. Great. Hey, Todd. Thanks. Good afternoon. Hey, Dave. Hey, Adam. Dave, maybe just to start I know that this is a very difficult comp in the fourth quarter. Fourth quarter last year, I mean, everything just really lined up and it was a fantastic quarter. But when I think about the implied fourth quarter guidance it's down almost 30% about 27% at the midpoint or so. You know, is that what we should think about as a proxy? You still have difficult comps in the first part of 2023 or are there some other levers that you can pull on the cost side? Just trying to think about the order of magnitude of earnings here in the fourth quarter and kind of the run rate into next year. Thanks. Yeah. Thanks, Todd. I think as you noted last year, we had about everything working for us. There was significant project trade. There was a significant peak. Capacity was tight and pricing was strong. I would say that as we move into this, as we're moving now, into that, what would be normally a peak season, things are much more orderly. It appears that there isn't the same kind of urgency that we saw last year. Inventories appear to be high and I think we're seeing that in the pull-through. We're seeing that in the muted imports coming in. Feels like there's some catch-up going on. It appears that you know, our customers definitely don't have the level of project business that we had last year. When we're on that year-over-year comparison for fourth quarter, I wouldn't say that is the same comparison. The reasons for that to be off the way that it is is in doesn't hold true as we move into next year. Now, all indications are the economy's gonna continue to soften, but we don't normally see the kind of project business and we don't have a peak in a first quarter. I would be careful, Todd, to try and extrapolate or read through what you see for fourth quarter into first and second. Yeah. Hey, Todd. I'd also add to that. I think I would model the normal seasonal change from Q4 to Q1 in terms of what happens with EPS as you transition, because you just don't have the uplift into Q4 that you typically would. I think Q1 would be we haven't put out guidance yet for next year, but I think you would see less volatility in EPS from Q4 to Q1 than you typically would. Okay. That's a fair thought. Thanks for your time tonight. I'll turn it over. Thanks, Todd. Your next question comes from Jack Atkins from Stephens. Jack, please go ahead. Okay, great. Good evening, and thank you for taking my questions, guys. Hey, Jack. I guess, Dave, maybe and Adam, feel free to chime in on this as well, but i I'm imagining top of mind for most investors after the cut to the guidance and the modest miss is really sort of things are slowing down faster than you would have anticipated 90 days ago, maybe even 45 days ago. Could you maybe update us on that trough earnings outlook that you provided six months ago? I think you said $4+. You know, I think any sort of help you could give us around what that would assume in terms of a magnitude of just a freight recession or a macro recession. Has your level of confidence in that $4 number changed at all based on what you've seen here over the course of the last few months? Yeah. Appreciate the question, Jack. We continue to have conviction for that floor that is north of $4 a share. You know, you look at the kind of performance that we've been able to do the last 3 quarters and what has been a changing environment where the spot market has been almost non-existent. Things have worked in a much more seasonal type pattern. Now, maybe even sub-seasonal now as we go into a fourth quarter. You see the way that we've continued to perform in our business. It isn't just one business in particular, but you can look at the low 80s OR on the truckload side. You can look at low to mid-80s% on the LTL side. You can look at still being in the upper 80s% in our logistics side and low 90s% in intermodal. I mean, those are remarkable numbers in what has been a market that has not given a lot of spot. I don't know that that's totally appreciated, maybe by the market. I don't know that people appreciate how durable the earnings per share of this business really are. We continue to have good conviction for that. Jack, I would say that we continue to pile up free cash flow, and it has not been a buyer's market. Things are working in our favor a little bit here as things start to adjust that will give us, hopefully better opportunities, and more opportunities to acquire businesses that are transportation-related, not just LTL. We've obviously talked about LTL quite a bit, but transportation-related and transportation companies. You know, that's gonna afford us a wonderful opportunity to continue to grow our business, even in kind of an uncertain time. I would also add that from prior cycles, we've learned this, that as supply rationalizes in the full truckload market, we can see, we usually see, and we expect to see that the truckload freight market will recover before the broader demand side market recovers. Because supply eventually gets to a point where enough has come out that you find that at least equilibrium or maybe at that point where you're undersupplied in a market, even though you might have muted demand. There has not been, in this last cycle, the kind of capacity additions that we've seen in previous cycles, and we've never seen, that we've noted, capacity come out as early as we've seen it come out of this cycle, really before contract rates were even negative. We saw capacity slipping away, and we believe that that's accelerating right now. There are few industries that have a prospect of recovering before the broader economic demand has a chance of recovering. The full truckload, I think, is one of those. Adam, anything? Yeah. I mean, just to reiterate, Jack, I mean, the plight for the small carrier may not have ever been as severe as it is right now. If you think about the higher fixed costs have been locked in with the very elevated used equipment that's been purchased over the last couple years. Now with rising interest rates, the inability to finance new equipment is a real challenge. If they do, it's at very elevated rates. We're seeing signs just even from third-party data, from the FMCSA, the FMCSA authority net revocations are down. The BLS data shows truck employment off over 11,000 this last month. Drug and Alcohol Clearinghouse was at a very elevated range, just under 7,000 for the month of August and is trending 20% higher year-over-year. We've had a lot of anecdotal scenarios with just carriers that we deal with, even what we're seeing on the used equipment market, where demand has fallen off pretty sharply here the last couple weeks, and there's probably several factors impacting that. yeah we've talked about demand has not been as robust. I think that's pretty clear. The fact that we believe capacity will rationalize much quicker than it has over other cycles still gives us great confidence in the $4 trailer. Okay. Can I continue to stay on this topic for one more second here, Jack? Please do. Yeah, sure. You know, as we sit here and we talk about supply eroding out of the space what does that have to do with $4 a share? Well, it's for our business to give up that much earnings per share, what that would mean for a typical carrier, for even many of the mid-size, even some larger carriers, but especially the small carriers, what it would take, what they would have to give up for us to get down to $4 a share is unsustainable. It doesn't wouldn't work. It doesn't. We don't see it getting that far. That could assume that we wouldn't be in a position also to continue to acquire and improve businesses over time as well. That's. There's a myriad of reasons and rationales that help us to have conviction that our earnings per share doesn't drop below a 4 handle. Okay. Well, I really appreciate you just for calling. Thanks for the time, guys. Thanks, Jack. Your next question comes from, Kenneth Hoexter from Bank of America. Please go ahead, Ken. Great. Good afternoon, Dave and Adam. Hey, how are you? I want to stick on that theme a little bit, right? Because I think that you set the bar with that $4 discussion, right? Now you're looking at that $1 kind of run rate in the fourth quarter. As you think about into early 2023 and the demand level, I get that you're saying you're seeing. Are you saying you're already seeing that pace of carriers leaving? I just wanna understand, maybe talk about your thoughts on your break even costs, where rates are relative to that. You know, just so we understand kind of how it differs for you versus the market, in terms of those costs, just given it seems like we're, the fourth quarter is trending toward that $4 number you're talking about. Well, we're seeing signs all around that small carriers are having difficulty. I think we saw that early as it materialized by mid-year when we had significant interest in our owner-operator program, where individuals that had previously owned a truck and appeared to be upside down in their truck and were getting out of a truck and looking to find somebody else that would put them into a truck. The used equipment market went from white-hot all-time high to very difficult to find anybody interested. I can assure you that's not because everybody's average age of a truck is so young that they don't have to do that. I mean, the need is real and acute for this industry. This industry should be buying or upgrading eight-year-old and nine-year-old equipment to four- and five-year-old equipment at a record pace right now. The truck orders, the new builds should be massive right now for what wasn't built over the last two and a half years that should have been built to maintain an average age. Completely contra trend based on the average age and the way it's always worked, you have small carriers that anybody who did get their hand on a used truck over the last year and a half has grossly overpaid based on where valuations are today. I think that's just beginning. Anecdotally, we hear from those that have receivables with small carriers, and it has turned ugly very, very quickly for them. You know, it began early part of the year, and it's accelerated dramatically. The pressures just continue to mount. I wouldn't be surprised if there aren't many small carriers that were just holding out hope for the fourth quarter, a strong fourth quarter, to bail them out of a tougher summer with no spot. Because many of them have found themselves very dependent on the spot market or very dependent on a non-asset broker who used to be able to charge a much higher rate to the customer and pass a lot of that through. That then has changed. You know, how does that change? What is that different to us? well Ken, we're not one truck and one driver that needs to be unloaded when we roll in. We have deep contractual commitments where we know our customers supply chains, and we provide them all kinds of trailer capacity and a high level of service and help to try and help them smooth out supply chains that have been distorted and disrupted over the last couple of years. As a result of that, the contractual market has not experienced anything close to what the spot market has been experiencing for the last 8 or 9 months. You know, naturally, as the economy cools and there's not urgency, you start to see pressure on contractual rates. But it's been a much different story than what happened to spot rates. I think that's one of those factors. There is right sizing that's happening as we speak. I think as Adam quoted the BLS data from the most recent month that they reported, which was August. I don't think that was September. I think it was August. For the trucking employment to be down 11,400, when it was not oversupplied to begin with, that's meaningful. Net revocations at nearly 7,000. You continue to have, which we're grateful for, the Drug and Alcohol Clearinghouse. It's at record high rates of drivers that are not qualified. We definitely have not been in a mode for now multiple quarters of any kind of growth, and it's all about attrition, and we expect that will continue. Thanks, Dave. Thanks, Adam. Thanks, Ken. Thank you. Your next question comes from, Ravi Shanker from Morgan Stanley. Ravi, please go ahead. Thanks. Good afternoon, Dave, Adam. I think just to touch on something that came up earlier in the Q&A. I think your tone and your message and the content of your message has fairly significantly changed since you were at our Laguna conference a little over a month ago. Again, not just you, a lot of your peers have done the same thing. Can you just help unpack that for us? You mentioned in your release the last few weeks of September saw a decline. How has that kind of unwind kind of panned out? What is your current view of peak season? What are your customers telling you their inventory situation looks like? Basically, how long do you think this downturn lasts? Do you think it's more like a 2019 or a 2016, a light freight downturn, a broad consumer recession? Kind of what are you considering right now? There's probably a lot to unpack with that question, Ravi, so I'll take a stab and then let Dave clean up anything I missed there. You know, we are out there in Laguna. You know, we still didn't have perfect visibility of what we were expecting for fourth quarter, right? It's rare that you go into a fourth quarter and not see some type of seasonal uplift in projects and spot opportunities. Especially with companies of our scale, we typically get some of these large kind of difficult projects to handle and they typically pay a premium. As we got closer into the fourth quarter and realized none of that stuff materialized, I think that we certainly view the market a bit differently. You know, how that translates into next year, I still think it's. We've got to see how that plays out. You know, it'd be rare to see a second fourth quarter in a row to have that type of lack of spot opportunities, right? We just have never seen, I think, a period of time that's lasted that long without any type of spot opportunities. As we talked about earlier with you know with great detail about the attrition of capacity, we think that's probably coming out faster than we've seen really in any other cycle. Just anecdotally, talking with customers, I mean, they all have in their own you know unique ways you know some inventory overhangs they've got to deal with. In most of our conversations, they feel like those are resolved over the next 6 to 9 months. It's probably gonna be unique by each customer, depending on the industry they're in and the strategy of their business. They do feel like it's a shorter term issue that they can solve. I think that's why we're just not seeing the urgency to move goods in Q4 that we typically would. Eventually I think inventories will be rationalized and that during that process capacity will come out. I think we'll be in a position, and that could be just a few quarters from now, where the market's you know much more balanced and the large players that bring value with scale and trailer capacity are in a position to see opportunities at premiums to help support our customers. Dave, anything you wanna add? Great. Thank you. Nothing to add. Nothing to add. Thanks, Ravi. Your next question comes from Amit Mehrotra from Deutsche Bank. Please go ahead. We're making the operator work today. Thank you very much. I guess I have maybe one question. You know, if I look at the quarter yield was up 8%, utilization was actually better sequentially. yet operating ratio deteriorated 400 basis points, which obviously reflects the project work, the freight collection opportunities, all the stuff that you mentioned. We haven't really seen like the real crack in contract rates at all. I'm just trying to sensitize the model. You seem convicted in the $4+ EPS trough number. We actually haven't seen the real pain as it relates to contract rates coming down. Dave, I'd love to get your kind of latest and greatest crystal ball estimate about how you think contract rates kind of evolve over the next 12 months. If you're actually starting to see obviously you're the largest asset-based provider. If you're seeing contract rates start to crack a little bit. Adam, you've talked about kind of this mid-80s OR as being kind of a very defensible line in the sand in a bad market. Is that kind of what's underwriting that $4+ number? Do you feel like the combination of weaker contract rates and then a still weaker freight selection or project environment can actually take you a little bit worse than that? Okay. Amit, we're gonna try and answer all three of your questions here. Okay? I'll start, then maybe Adam, you can pick up that last one. First, this idea of the progress in utilization and the deterioration in the operating ratio. I think that this somewhat is the explanation there, I think is instructive as you look forward to contract rates. What that tells you is there is meaningful inflation for our business, and there has been, and it continues. We've done a fair job of mitigating and managing it throughout the downturn. I mean we're fortunately not in a situation where you're trying to buy a microchip that used to cost you $3.50, but now it costs you $200 or something. Our driver wages have gone up materially over the time frame. That's what was needed, it was appropriate. You don't just backtrack on that. That's not how that works. Cost for equipment, cost for maintenance items and the maintenance service. As we look around we're affected by inflation. I do believe that does create a bit of a floor in terms of pricing. I wouldn't be surprised if the non-asset-based brokers don't feel a little bit of pinch in this fourth quarter as they're finding a floor in pricing that carriers can haul a load for, while maybe with the lack of project freight and whatnot, not able to get as much from a customer. I you know, if we look at what our rate per loaded mile did in our truckload business, this was the first quarter in quite a while where the rate was only up single digits. Clearly our costs are up more than single digits on a year-over-year basis. That is the reality that we are facing as truckload carriers going into the bid season. I would say that based on our operating ratio, I'm not sure that there's anybody in this industry that's managed the cost better than the way that we have, and how we've performed. We go in and compete with other carriers, and just only have so much room to work with for contract rates. Second thing I would note about in trying to predict and anticipate contract rates the best example we have to go with, Amit, would be to go back to 2019, where over that 15-month period when we went from peak to trough. Took 15 months, give or take a few weeks, to go from the lowest and to see the highest rate. We went from an unbelievable period of 2018 grossly oversupplied the industry, saw the downturn take place. By late spring of 2020, things had bounced back. Sorry, we had an unintentional mute there. Over that timeframe we saw a massive drop off 50%-55% in spot rates. Now, arguably, what we've seen this year may even be more than that for small carrier spot rates. We saw contract rates only off approximately 5% in that full 15-month period. As we go into a bid season with legitimate imputed cost, operating cost per mile increases that are in many cases irreversible I'm not expecting that there's the kind of room to retrench a whole lot on contractual rates. Now, as we go through this process, we have some customers where perhaps we can do things a little bit more efficiently or based on the timing of the renewals, maybe there's an opportunity for us to do something and secure some volume. We've been doing that since the first of the year, since January, and those results are in our numbers thus far. We'll. Sorry, we have a mute button that likes to go on its own there. We'll continue to provide a deal if we can find a more efficient way to do this. One of the things that we have going for us is we have economies of scale that are unique to our business, where there are sometimes some things and efficiencies that we have and we can offer that maybe others can't. Those are some of the things we've already exploited thus far this year. There's more we're going to do. This is partly why we talk so much about power only. You know, we were able to find small carriers to come and haul loads at rates that gave us meaningful margins in our logistics business when they had all kinds of other opportunities. You can imagine right now the interest in small carriers to want to come and partner up where we have loads and we have trailers. I mean, it's definitely more than we can keep up with. You know, we're finding ways to create efficiencies and to create wins as we move through the bid season. Adam? Yeah. Just to add, I mean, I think you got to recall how the bid season really played out this year. You know, about this time last year is when it started, spot rates were still elevated. There was probably opportunity to move contract rates up that needed to be. As you got halfway through the bid season, spot rates had come off, and so there wasn't a lot of contract rate improvement on a year-over-year basis in the back half of the bid season. As you go through this year's bid season, there's not going to be near the movement needed with those customers in those lanes based on what they renewed at. I just want to make sure we realize that that the bid season kind of played out. There's a tale of two cities there. Also, as you go into a more difficult environment, the large, well-capitalized fleets typically see. Sorry, we had the mute button. More labor. Yeah, more labor come to the large, well-capitalized fleets with stable networks, which will have an opportunity to seat more trucks, most likely be more productive. Our goal is to reduce our empty mile percentage to allow us to really run more miles with our seated trucks to help offset any of the rate pressure we may feel. Certainly, I think, you know our culture, we'll become very cost-conscious, and we already are, but we'll dig deeper into our organization and most likely make progress where we can from a cost standpoint. Sorry, I know we had a mute button. Hopefully you got your answer. Thank you very much. I really appreciate it. Yeah. Thanks, Amit. Your next question comes from Tom Wadewitz from UBS. Tom, please go ahead. Yeah. Dave and Adam, good afternoon. Dave, I think you had some comments about M&A that seemed to indicate that you have some optimism. I think you said maybe the next several quarters. You also referred to transportation related and kind of said, well, it doesn't have to be LTL. I think most people are focused on LTL. Wanted to see if you could offer some further perspective. Do you think are you optimistic you might be able to do an LTL deal in the next several quarters, or would you point us more to other things? Then when you say transportation related, what I don't know if you can give us a little more perspective what you mean by that. Thank you. Okay. Yeah, thanks, Tom. I think if you noticed some optimism, I think that's fair. Boy, we've worked really hard and looked at many deals. I would say that certainly seen an influx of deals particularly appears like a lot of private equity are looking for a new home here before we enter into a different economic environment. A lot of things we've looked at. You know, timing is everything in these kind of situations. We have a lot that we think we've built. We feel like there's a lot of individuals that have watched us closely, are probably watching us closely and to understand how serious we are about preserving local brands and then trying to collaboratively help their business be better and the other multiple businesses that we have. We feel like we're somewhat auditioning, if you will, for others that we've had conversations with. That's all underway, and I feel like we're making some headway. I think when you see a change in the environment when it's a little harder for individuals to get access to capital and it. Sorry. Just gonna have to get a new mute button when it doesn't mute on its own. when when. What I was saying is we feel like we've got some good headway there and some good relationships. Our interest in acquiring only continues to grow and we can be a source of capital and solve some issues for individuals that are looking for what's next for their business. Now, that being said, continue to be very interested in LTL. It feels like LTL has been through perhaps a peak there in valuation. And you know, we've been through an unbelievable time there, and we still think that that business will navigate well whatever is coming our way economically relative to other businesses. That's one that we continue, Tom, to be very optimistic that we're gonna have some matches to expand our super-regional network. You know, we talked about this in the release that here in the fourth quarter, we're going to have MME and AAA Cooper, two totally independent brands working under one network together in a seamless way. There have already been efficiencies with the way we've already worked together, and this will take it to a new level. You know, we're just over a year into LTL already and we love everything we've seen and so that is very interesting to us. I would say that you know, typically as we roll over on cycles, we start to see valuations change over time in the full truckload world. I don't know that full truckload companies have been given the kind of reward that historically they deserve in a time like this. If you look at our P/E multiple in particular, especially given the return on net tangible assets of 22.4 for the last 12 and 12 months, just to name a stat, and what kind of a multiple you would normally see a business like that trade at. You know, it's times like this that we often have interest in truckload again because where we anticipate the market to be going and moving as well as times like these that sometimes businesses reassess what their game plan is. When I say transportation related, it would be in part because we've bought a variety of different types of companies just over the last year and a half between tech and an expedited broker, non-asset, and two LTL firms. You know, we may be overdue for some truckload business and there is no shortage of truckload businesses out there. We feel like we we know how to do truckload for sure and that would be interesting to us. That's what I intended with what I shared earlier, Tom. That's great. Thanks, Dave. Appreciate it. Thanks, Tom. Well, that concludes the time for our call. I will tell you, it appears that we still have nine analysts that are in our call queue that we were not able to get to your questions. Again, we would refer you to the phone number we gave earlier to give us a phone call and reach out if you'd like to still have a discussion. Thanks for everyone's interest. Be safe. Ladies and gentlemen, this concludes your call for today. 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