Good afternoon. My name is Ina, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Knight-Swift Transportation Fourth Quarter 2023 Earnings Call. All lines have been placed on mute to prevent any background noise. If at any time during this call require immediate assistance, please press star zero for the operator. Speakers for today's call will be Dave Jackson, President and CEO, and Adam Miller, CFO. Mr. Miller, the meeting is now yours. Thank you. Thank you, Ina, and good afternoon, everyone, and thank you for joining our fourth quarter 2023 earnings call. Today, we plan to discuss topics related to the results of the quarter, an update on current market conditions, and our earnings guidance. We have slides to accompany this call, which are posted on our investor website. Our call is scheduled to last one hour, and following our commentary, we will answer questions related to these topics. In order to get to as many participants as possible, we limit the questions to one per participant, and if you have a second question, please feel free to get back in the queue. We will answer as many questions as time allows. If you're not able to get to your question due to time restrictions, you may call 602-606-6349. So to begin, I'll first refer you to the disclosures on slide two 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 United States SEC for a discussion of the risks that may affect the company's future operating results. Actual results may differ. Now I'll turn the call over to Dave Jackson for our overview on slide three. Thank you, Adam, and, good afternoon, good evening, everyone. The charts on slide three compare our consolidated fourth quarter revenue and earnings results on a year-over-year basis. Market conditions in the LTL business were strong, while soft demand continues in the truckload space. Revenue, excluding fuel surcharge, increased 11.6%, while our adjusted operating income declined by 78.6%. GAAP earnings per diluted share for the fourth quarter of 2023 was a loss of $0.07, and our adjusted EPS was $0.09 per share. These results include a $71.7 million operating loss in our third-party insurance business, which we've decided to exit, as we will discuss later on the call. The insurance loss negatively impacted our adjusted EPS by $0.30. Excluding the loss on the insurance business, our adjusted EPS would have been $0.39 per share. Our results were also negatively impacted on a year-over-year basis by a $17.8 million increase in net interest expense, approximately $0.08 per share. Now on to the next slide. Slide four illustrates the revenue and adjusted operating income for each of our segments. Truckload freight demand saw a modest seasonal lift in November before slowing more than anticipated in December. The seasonal lift in November was not enough to offset the productivity disruption we typically experience during the holidays. This not only impacted our truckload business, but logistics and intermodal as well. Freight demand in LTL was strong and led to an 11.9% increase in shipments per day in the quarter. U.S. Xpress made further progress and achieved positive adjusted operating income in each month of the quarter, as revenue and cost per mile both improved over the third quarter. Our existing logistics business navigated significant declines in volume and revenue per load year over year to maintain a low-90s adjusted operating ratio, and U.S. Xpress Logistics continues to close the gap, posting an adjusted operating ratio that was only 150 basis points behind our existing logistics business. I will now turn it to Adam to discuss each segment's operating performance, starting with truckload on slide five. Thanks, Dave. For the truckload segment, we saw modest seasonal activity as expected, but as noted on the last slide, the drop in demand in December was greater than anticipated. There were a few seasonal projects for truckload, and the projects that did exist were smaller in scale than what we see in a typical peak season. Loose capacity prevented any premium pricing opportunities as well. Revenue per mile was up 1.4% sequentially, reflecting stability in the existing businesses, while U.S. Xpress saw positive progress as we continue working on the business mix. Adjusted operating ratio for our existing truckload business was flat sequentially, and U.S. Xpress improved 280 basis points. The inclusion of U.S. Xpress negatively impacted the adjusted operating ratio for this segment by 250 basis points. On a year-over-year basis, our truckload revenue, excluding fuel surcharge, increased 25.5%, reflecting a 12.5% decline in the existing truckload business prior to the inclusion of U.S. Xpress. Revenue per loaded mile fell 11.6% year-over-year, or 11% before including U.S. Xpress. Miles per tractor increased 8.4% overall, or 6.4% before including U.S. Xpress, largely driven by the disposal of roughly 1,300 unseated tractors over the past year in order to reduce cost. Now we'll move to slide six. The benefits of our diversification into LTL really stand out as this segment continues to perform well. Our LTL business grew revenue, excluding fuel surcharge, nearly 14% year-over-year, an acceleration versus the 6.9% growth in the previous quarter. This business delivered an 85.5 adjusted operating ratio and grew adjusted operating income 14% year-over-year. Pricing growth remained solid as revenue per hundredweight, excluding fuel surcharge, increased 9.5% year-over-year. As of the end of the year, we have brought 14 new service centers online since entering the business in late 2021, and efforts are underway with 25 more properties in various stages of procurement, development, or reconditioning. Filling out a super regional network in the short term and creating a national network in the long term will allow us to participate in more freight and enable us to find opportunities to further support our existing truckload customers with LTL capacity. This remains a key strategic priority for us. Now we'll move to slide seven. The logistics market continues to be a challenge, as many brokers have struggled to find enough volume and margins have been compressed. Being an asset-based logistics provider allows us to provide our customers seamless service, regardless if it's on our own assets or one of our partner carriers. This allows us to provide both committed and surge capacity and drop and hook trailer pool services at scale. Because of this, our logistics business remains disciplined and nimble, maintaining a low 90s adjusted operating ratio despite a challenging market. The U.S. Xpress logistics business continues to improve both the cost structure and pricing disciplines, and made further sequential improvement in adjusted operating ratio, again, closing to within approximately 150 basis points of our existing logistics business. Overall revenue was down 5% year-over-year, as revenue per load declined 7.4% and load count improved 2.6. Excluding the U.S. Xpress Logistics volumes, load count was down 22.7% year-over-year in the existing business. Now on to Slide eight. In our Intermodal business, revenue decreased 16.4%, driven by a 19.7% decrease in revenue per load, partially offset by a 4.2% increase in load count. The operating ratio was essentially flat with the previous quarter. Our Intermodal business didn't perform as well as expected, as volume during the quarter was negatively impacted by several service-sensitive customers temporarily converting Intermodal volume to Truckload during peak season to take advantage of improved transit times and the competitive Truckload pricing. This conversion not only impacted volume, but negatively impacted our revenue per load. You know, many of these customers have now begun to return volume back to Intermodal, and we expect to build volume in the second quarter as we work through the current Bid Season. Now we'll move to Slide nine. Slide nine illustrates our all other segments, formerly referred to as non-reportable segments. This category includes insurance, maintenance, and equipment and sales, and rentals under the Iron Truck Services brand, as well as equipment leasing and warehousing activities. For the quarter, revenue declined 46.6% year-over-year, largely as a result of our actions to address the challenges within our third-party insurance program, including significantly reducing the exposure basis. The $83.5 million operating loss within the all other segments is primarily driven by the $71.7 million operating loss in the third-party insurance business. Based on recent results, including the continued negative development of claims reserves, we decided to initiate exiting this business during the quarter. We have begun canceling policies and expect to have that completed by the end of the first quarter of 2024, at which point all third-party insurance operations will cease, though we'll still have the outstanding claims to administer until ultimate settlement. We have already reduced the number of trucks under coverage by nearly 75% from its peak in the fourth quarter of the prior year, and we do not expect this business to have a material impact to our results in 2024. Now I'll provide an update on the progress of U.S. Xpress on Slide 10. U.S. Xpress continues to run ahead of plan on our projected path to improving results. As noted in the previous slides, the U.S. Xpress truckload and logistics business have already made meaningful progress and achieved a combined 99% adjusted operating ratio for the quarter. We highlight some of the progress on this slide. You will notice these are fundamental areas of the business, including driver support and development, a decentralized operating model characterized by empowerment and financial accountability, a cohesive strategy for the network and freight selection, and a fanatical focus on cost. As the team covers ground on these initiatives, it is yielding improvement in the operating ratio. The progress on revenue per mile is noteworthy, as this has been accomplished in a difficult market and in between bid seasons, given the timing of the acquisition. Further improvement can be made through the bid season as we expand our pursuit of more lanes for the network. We continue to be pleased with the early progress and for how this consequential truckload business is positioning for the future, reaching positive adjusted operating income before an improvement in the market. We are glad to see the efforts of the U.S. Xpress team already paying off, and we appreciate their hard work. Now I'll turn it to Dave to provide an outlook on the market. Thank you. Slide 11 contains our outlook on market conditions for the first half of 2024. The LTL market should continue to see solid demand as the recent capacity disruption in the industry continues to be sorted out. This should support further yield improvement as the new business is increasingly repriced through bid activity. In the truckload space, we believe that retail inventories is at a relatively low level, though shippers caution about the direction of the U.S. consumer behavior is governing freight demand for the time being. We expect current soft conditions to continue in the first quarter with modest seasonality in the second quarter. The weather disruptions early in the year only increase the degree of difficulty for operators. On contract rates, we do not believe asset-based carriers can afford for rates to go down any further from current levels. The pace of cost inflation should ease, though plentiful work alternatives in the broader economy will continue to pressure driver retention and utilization until freight conditions improve. We expect the used equipment market will weaken further as small carriers struggle and capacity exits. Now on to slide 12 for our earnings guidance. Given the unusual degree of uncertainty regarding the direction and magnitude of outcomes from bid season, the timing and degree of an inflection in market conditions, and the difficulty assessing prevailing levels of demand as a result of weather disruptions in January, we are adjusting our approach to earnings guidance to provide two quarters of forward visibility as opposed to the full year. We will reassess this approach as market conditions develop. We expect the adjusted EPS range, or the EPS will range from $0.37-$0.41 for the first quarter of 2024, and will range from $0.53-$0.57 for the second quarter of 2024. More detailed thoughts on the assumptions supporting these earnings expectations are provided in the earnings release available at our investor website, alongside with this slide deck at investor.knight-swift.com. That concludes our prepared remarks. Ina, we will now, we'd like to open the line to entertain questions. Thank you. At this time, I would like to remind everyone, in order to ask a question, press star and the number one on your telephone keypad. Again, that is star and one to ask a question. Your first question comes from the line of Thomas Wadewitz from UBS. Your line is now open. Hey, Dave and Adam, it's Michael DiMattia for Tom. I just wondered if you could provide a little bit more color in terms of customer activity and freight volumes over the course of December and into January, and looking at the guide for 1Q, how much weather impact is in there? Thank you. Okay. Well, Mike, as we noted, you know, we saw things trade down in December. What little project activity, and I would say little, you know, we anticipated modest, and I would say that we saw modest in November, probably saw less than modest in December. You know, that traded down, leading to a month that didn't produce the kind of earnings we would have expected or that we were on pace for through the first two months of the quarter. As we look into January thus far, you know, the last two weeks have been, you know, pretty severely impacted by weather. Certainly you see that we've had LTL terminals that have been shuttered, particularly given our concentration through the Southeast. Certainly it's had an impact on our productivity on the truckload side, and so, you know, I probably am not gonna quantify what that means, you know, exactly what 2 weeks' worth of weather effects on a quarter's EPS, but certainly it has tempered what we thought we would typically earn in a January. Now, hopefully, we'll see a little bit of a recovery as a result of things being down, but certainly not enough to make up what was lost. So there's a factor in there. Probably those weeks, you know, you would see an impact to our business that would be a negative double digit in terms of revenue production for each of those weeks. Yeah, I'd say you always have some weather in the first quarter. It just depends on when it hits, right? And so I don't think this is materially different than other periods. And, you know, again, we expect that we'll have some freight that our customers have got behind on, that we'll have to pick up and move. It's kind of more of a question of, do we see kind of that seasonality as it builds into March? And so right now we're just cautious on, you know, really trying to estimate that there's an inflection early in the first half of the year. And so I think first quarter we've remained, you know, relatively conservative. That's, that's great. Thank you. Thank you. Your next question comes from the line of Jack Atkins from Stephens. Your line is now open. Okay, great. Thanks for taking my questions, guys. So I guess, you know, Dave, would love to get your thoughts on the early part of bid season so far. You know, obviously we haven't seen a recovery in freight fundamentals to this point, but, you know, we're also seeing some signs that the freight markets have stabilized and, you know, to your point, inventory levels are getting lower. You know, how are shippers treating bid season? You know, are they trying to get the last sorta pound of flesh they can out of you? Or are they understanding that we're kind of reaching a point where you could see a turn in the market this year and they're preparing for that? Yeah. Well, you know, Jack, it's a good question. It's a valid question. I will acknowledge we are still very early in the bid season. We are grateful for customers who have recognized the fact that rate concessions we've given have come directly out of margin, because there hasn't been any cost reprieve for us through this timeframe, where we're able to pass on efficiencies, if you will. So it's simply come out of margin. If you look at the industry, the publicly traded truckload carriers, it's a common theme for all of us. And so customers who recognize that, recognize where we are in the cycle, you know, have worked with us. Not to the degree where we get an increase that helps us get back to where we want to be, but also, you know, shows a sign of trying to provide some consistency in the network and allowing us to move forward. Now, there are some situations where I think we do have some customers who perhaps operating under a mandate, maybe a little bit of a more short-term focus, might be a little more aggressive in pushing. The reality is, there is a limit to what you can do. And I think if you look at certainly our truckload model and others we compete with, based on their public reports, we've hit that, we've hit that limit. You know, it feels like this go around, you know, the freight market has worked in an extraordinarily efficient way, where we've discovered the bottom. And that happened some time ago, you know, around the middle of last year, it appears. And that's where we are. You've seen small carrier rates. They haven't, they've hit a bottom. And so it doesn't take a lot of creativity to understand where this can go from here. A consistent theme that we have seen through this process, from many, if not most customers, has been a very definite preference towards moving their commitments to an asset-based provider, as opposed to a non-asset-based broker. I don't believe we've ever seen extreme commitments, the extremely high level of contractual commitments from brokers. And so they sit here today with this super high committed percentage of their business at incredibly low loads or low rates, which really you could say are unsustainable as we see small carrier capacity leaving, as we see the bottom of spot rates not keep dropping, and as we see margins evaporate in the truckload space. And so we're at a level that's not sustainable, and so we have non-asset broker capacity that is committed at these very, very low rates and, you know, certainly seems to be setting up for a squeeze there. And so some of our customers, I think, are able to read the writing on that wall. What none of us know is exactly when that's going to happen. Every day that goes by, we're a day closer to an inflection, and we've ridden out the longest trough that certainly that I've seen in, you know, almost 24 years of being here. So that's a little bit of the lay of the land, Jack. I'm not sure if I adequately answered your question. Do you have a follow-up to that? No, you did, Dave. I guess I'm just trying to get a feel for, you know, are some shippers really trying to get that last push, or are they willing to work with you? And it sounds like the answer is they're willing to work with you a little bit here, by and large, and is that the right way to kind of think about it? You know, these are negotiations. Sure. I can appreciate that our customer on the other side, you know, they're trying to do the best they can for their interests. I will tell you, there is a place, you know, the Clint Eastwood line: "A man's got to know his limitations." There is a place where we simply cannot concede anymore, and we often get to these in cycles. But we've never been pushed this far from, you know, how high the OR gets here. But we are definitely in that place where the alternative to accepting rate decreases is we'd have less commitments, we're more exposed to the spot, and we have to rely on our diversified model. So the way I would answer your question, Jack, is I would say there are some customers that I believe, through this process, will lead us to have a little more exposure to the spot because of perhaps a short-term objective that they have. Now, that seems to be the minority so far, but again, it's only January. We're early on in the process. We hope that doesn't happen because that only leads to disruption for us and for them, and we think it costs more in the end. I think that we could demonstrate that with data. So we hope that's not the case, but we are not in a position to lower our rates through bids right now. Okay. So. Okay. That's very helpful, Dave. Thank you for the time. Really appreciate that answer. Okay. Thanks, Jack. Thank you. And your next question comes from the line of Ravi Shanker from Morgan Stanley. Your line is now open. Great. Good afternoon, gentlemen. Dave and Adam, would like to pick your brain on your extensive, cycle knowledge, if you will, again. We've seen spot rates come up, quite meaningfully in the last few weeks. Our in-house indices are also kind of looking a little bit better. I'm a little surprised that you still had late December drop off, with this improvement, and doesn't look like you're pointing to much better for January. Why do you think there is this disconnect between the data points and what you're seeing on the ground? If there is a disconnect, is it weather or is it something else? And if you can just kind of elaborate a little bit more on what happened, late in the fourth quarter that we went. Thank you. Yeah, I think, Ravi, we have to be careful that just because some of the data is a little bit more accessible and easier to get access to, in kind of almost real time, I think we just have to be a little careful to not paint with too broad a stroke, on some of those smaller data points. I do think that maybe I'll share an anecdote that we've heard. Our team and our logistics group has heard this multiple times from small carriers, which is, we're gonna see what the next four to six weeks looks like and decide what we do with our business from there. And so I do think you have some small carriers that are just basically saying, "Hey, I just can't, I can't, I can't run to stand still. I can't just keep moving and getting loads, long haul loads in particular, at unsustainably low rates, just to keep moving in hopes that something else will happen." And so I think you're starting to see people that are just saying, "Hey, if it doesn't pay, I'm not gonna do it." And so the market is stressed. I think you know, a data point that's been interesting to watch has been the net revocations of authority on the last business day of the month. We've seen spikes at the last business day of November. We saw it happen again in December. December's was smaller than November, however, not very many would renew their insurance on the last business day of the calendar year. And so I suspect at the end of January, we could see that spike again. We think that spike is tied to carriers who are not able to find insurance. It isn't just increasing insurance premiums. That's been an issue, but there have been people willing to finance that, of course, at pretty expensive rates on top of that, which further burden the business, but allow you to live for another day. The challenge is, if somebody is not willing to underwrite the risk, and, you know, painfully, we're aware of what that risk is with very small carriers, and we completely understand why that market is shrinking and why there are small carriers that we believe will struggle to find anybody willing to take that risk. We think we're seeing the signs of that in that data point in particular. So the market's particularly stressed. As for why you might see one little data point tell you something different, a month like December versus maybe what we might feel over a broader period of time, I'd just say, you know, not all data is created equal. Well, what I'd also note, Ravi, is over the period, if you look at the last four weeks, you've had the holidays where you have a lot of small carriers, independent contractors, who aren't, you know, where freight isn't plentiful. They will take time off during the market. So that puts a little pressure on finding capacity. You may see a blip in spot, and then you have the same, you know, issue as you go through weather, where you have a lot of trucks, especially the safe ones, that are shutting down, and that puts pressure on the market. I mean, we see it in our own markets today, but it's not necessarily because demand is there. It's because you just don't have supply readily available. I think as we watch, as the weather, you know, starts to clear up and we watch those trends over the next few weeks, I think that'll be a little bit more telling than just looking at the last four. Good points. Thanks, Ravi. Thank you. Thank you. Thank you. And your next question comes from the line of Ken Hoexter from Bank of America. Please go ahead. Hi, this is Nathan Ho, dialing in for Ken Hoexter. Just wanted to focus a little bit on the encouraging signs coming out of the U.S. Xpress integration with the 99% operating ratio and the 100 basis points of sequential improvement. Now that the segment is contributing a little bit of operating profits, I'd love to understand a little more on what's next for further alignment of its business structure. And within your first quarter and second quarter targets, what are you expecting in terms of further cost and growth synergy gains? Thanks. Nathan, thanks for the question. Maybe I'll start off, and Adam, you can certainly chime in. And you know, first, I use this as an opportunity to just acknowledge the wonderful people we have at U.S. Xpress. I can't say enough good things for how they have gone to work and worked together with us, the degree to which they've been open to collaborate. We're just, we're excited for them. I think that they're excited to be part of the group. And maybe to answer your question about structure and how that changes, you know, this is a brand, an independent brand that we support. And so we have two leaders that have moved to Chattanooga. They did this several months ago in anticipation of the transaction. And so they are there. They... They are tax paying residents of Chattanooga and have assimilated with the team, and so that business will continue to perform independently. I'd say that thus far in these first six months, the progress has probably been two-thirds cost, one-third rate. That likely flips here as we go into the next two quarters, where rate continues to grow as cost doesn't grow at the same kind of pace, but there still are cost opportunities. As was mentioned, Adam, that Adam mentioned with the slide, that we highlighted a few key things. One of those was dealing directly with our customers, not going through a broker intermediary. And so the sales group, the operations group, have worked very hard to, you know, when they, when they had an abrupt change and, and needed to deal direct, and so that's, that's been a positive to the rate per mile. If we look at, just overall, the approach in the network and their approach to bids, we've been able to bring a, a different mindset in terms of how they can go about building the network, and they've been very receptive to that. And so, you know, now we're receiving a steady diet, I would say, kind of across our business of about 110 bids a week, is the going rate. Some of those can be mini bids, some of those are much larger network, bids. And so, that's feeding into this decentralized operation that U.S. Xpress is well on their way towards, that we think will lead to lower driver turnover, better operating cost, with a high level of service and good returns. Good revenue generated on our trucks with ORs that over time, we believe will be in that low 80 range, similar to what we would expect over time in our Swift and Knight brands. Adam, anything else? I mean, I think you hit it well. Again, I'd just highlight being more active in the Bid Season, probably having more opportunities with customers that have relationships with our other asset-based brands that will open doors for U.S. Xpress. And then just, you know, continued progress on closing the rate gap between U.S. Xpress and our other asset-based brands. And so I think we'll, we expect to make progress. It's tougher to do that on rate in an environment where you don't have much wind at your back, and so they've been able to make sequential progress despite that. When, you know, I think there is a more favorable environment, we'd expect that progress to ramp up very quickly. Got it. That, that's very clear. Thanks, Dave. Thanks, Adam. Thanks, Nathan. Thank you. And your next question comes from the line of Bruce Chan from Stifel. Please go ahead. Hey, thank you, operator, and afternoon, gents. You know, just insurance aside, it was good to see the progress with growth in the LTL segment. Maybe just wanted to get your thoughts on the timeline for how those new terminals are going to come online, especially as you start to think about the potential for, you know, maybe any margin drag as you spool that network up. Anything that, you know, we should be watching there as we model out the OR? Yeah, well, let me maybe I'll talk for a moment here on what some of the cadence of what these look like, and then maybe, Adam, if you want to chime in on tempering OR as we do this. But, you know, we will acknowledge first off, Bruce, that since 2021, we've opened 14 locations. While we've seen that OR, you know, consistently on an annual basis improve as we've settled into that mid-80s. So, we like that along the way, you know, it's about this time last year that we were integrating the MME network and the AAA Cooper network, and so those are operating on one network. So from a technology optimization standpoint, we're just one LTL company, but from a uniform and relationship in the local markets, we appear and we work with two different brands, MME in one region of the country and AAA Cooper in another. And so we anticipate that as we have opportunities to enter new markets through organic and also through acquisitions, that will continue in, for the most part, with acquisitions. Now, as for organic, we mentioned we have 25 in the pipeline. Five of those locations just opened up this week. So there's 20 more that we'll cycle through the remainder of the year. Probably about half of those we expect to be open in the first half of the year, and then the remainder on the back half. First 60 days, we're really trying to get, build up enough volume to break even. And, and that's, that's largely done by, opening up those zip- those new serviced zip codes to, 3 PLs. And then over the course of the year, you, get a chance to, build out that business through the nationwide bid, or bids. There's also some local business we'll often pick up in addition to things that come through the 3 PLs. There are still some additional locations through the Yellow bankruptcy that we are, that we're pursuing, and so we think we expect that the 25 number will grow. Those will likely be on the lease side. Those are, those are in the process of being settled as we speak. And so, this is very measured growth, I would say. You know, I'll give you an example. The five locations we just opened are in the bustling cities of West Burlington, Iowa, or Cherryvale, Kansas, or Rock Island, Illinois, or Forrest City, Arkansas, or Wichita Falls, Texas. So these are smaller markets. These are not huge facilities. We've been able to procure these at attractive rates on a per door basis. And so, this is a, I would say that it's a, it's a very conservative growth plan, but nonetheless, there will be some pressure to OR in those locations. Adam, any thoughts on? Yeah, I think, as you mentioned, it, it does take, you know, 60-90 days to build up volume to break even. So it does puts a, a little OR pressure on the business, and so you may feel, you may see a, maybe a sequential change from Q4 to Q1 that's a, that's a little higher than normal seasonality. But I do feel like once we get our legs under us, at least with the first, the, kind of the first batch of them, or maybe the first half, there'll be that. That revenue generation of that half will more than offset the cost that we experience from ramping up the back half. So I don't see a material impact, but maybe earlier in the year, we would feel that, and then we would be ramping that in the back half. Thanks for the question, Bruce. Thank you. Yeah, thank you both. And your next question... Yes, thank you. And your next question comes from the line of Jordan Alliger from Goldman Sachs. Your line is now open. Hi. Yeah, just to follow up a little bit on the last question, it was very helpful to think about this year and the growth. You know, obviously, looking at your map, there's. I think you talked about over time, going from super regional to a national LTL carrier, there's obviously some gaps in the map that exist today. So I'm just sort of curious, how long does it take to go to, you know, cover more of the country and some of the areas that you're not in now? And does the current plan, even this year, include newer areas, or will that have to come more in, like, a chunky type of acquisition type of a deal? Appreciate the question, Jordan. We, you know, realistically, we would anticipate over the next two years, being able to consider ourselves as having nationwide coverage that was in-house. Of course, today, with interline partners, we can service the whole nation, but there's a. We'll get access to nationwide network bids, when we can do that all in-house, you know, together in a system. And so we expect for that map to look less super regional and more nationwide over the next two years. A lot of these locations that we just referred to that are, you know, the 25 pallet that we have in the pipeline, plus, you know, perhaps we may add another 10, let's say, lease type facilities on top of that. Those are largely gap fillers, if you will. Those fill in space as part of a very intentional effort so that we can acquire some chunks, as you will, as I think, how you referred to it, in other regions that we don't currently service. So we are, you know, this is a multi-year plan, but it's not as far out as you might think. So we're well on our way. I would say that the Yellow terminals, I would say, you know, we purchased LTL terminals from two other businesses that no longer use them or also had went through a bankruptcy or liquidation process. Those have been, you know, those have been wonderful gifts for us. I mean, what it would have cost us to go acquire the land and build these, you know, we, we would've, we would've had a much more significant capital investment. And so, you know, we're grateful that these have come. We've taken a very conservative approach here, but, but we're, we're on, we're on our way. We're, you know, hopefully by the end of 2025, we're able to, we're able to show you a map that, that makes it very clear we're a nationwide LTL network. Thank you. Thank you. Your next question comes from the line of Allison Poliniak-Cusic from Wells Fargo. Please go ahead. Hey, guys, it's James on for Allison. Just wanted to ask about TL capacity and just the amount that it's oversupplied. Do you expect sort of a clearing event to push out some of the capacity and drive exit, or do you kind of see more of a gradual process? And kind of what I'm trying to get at realistically is, without a clearing event, could you realistically see contract rates up in the second half versus the first half, or do you really need a clearing event and not the gradual to see positive rates in the second half? Well, you know, James, it's impossible to predict exactly how it's gonna go. If we look at previous cycles, you have several challenges that sometimes there's a little catalyst, whether it could be a spike in fuel prices back in the day. I think we've seen even a weather event before that had a big impact there, or a material change in demand. We're not seeing a big material change coming in demand. The fact that inventories have been drawn down so much, you know, hopefully a day is coming where there's a little bit more mindset for growth. Feels a little bit retailers have a more conservative view and are more focused on profits as opposed to top line, and we would benefit a little bit more in a top line focused environment. But I think that in this business, a capital-intensive business, if you take time off investing in the capital, or investing the capital that's required, it starts to really catch up with you. And the cost of new equipment continues to be inflationary. The values for used equipment have dropped after being at record high prices, which is in many cases where people acquire their equipment. And so there's a limited useful life to the assets that they have, and so you can get by for a while, but eventually things start to accumulate. It appears that insurance could serve as a bit of a catalyst, that finally is the final straw for people. But one thing that we have seen in previous cycles is this seems to snowball. An avalanche might be too strong, but whereas these things all accumulate, eventually you hit a tipping point, and once capacity starts to come out, it's just the beginning. And as capacity starts to come out, financing dries up, nobody wants to take the risk, operating environment gets difficult, small carriers perhaps cut corners. Next thing you know, they become too risky to insure. And so, there's just kind of a chain of events that start to happen. So it's hard to guess exactly when that's going to be or how far we are down that path. Our view here is, it's going to be a very difficult first quarter for small carriers, which is, you know, we're well on our way to the probably two-year anniversary, where it's hard to think that a small carrier would have profit, really, over a nearly two-year span. And so, that's probably the best I could say for that. And so we just watch for these indicators that give us a sense for all of the different factors that are accumulating, and then we see if there's this kind of avalanche effect. Got it. But without that avalanche effect, there would still be incremental rate pressure in the second half or, or is it sort of trending where it could actually still improve without the avalanche, sort of, to the point of it? And thank you. Yeah, we're not, we're not getting a read on broader economic demand that says that that could be a catalyst. So we think this will be supply driven, as we feel that, that most, if not all, trucking cycles have really come on, on the, on the under supply side. Maybe, maybe 2004, 2005, 2006, those were some banner economic years, that maybe that was the exception to that, but outside of 2004, 2005, 2006, it sure, sure feels like every other cycle has been supply induced. Every other recovery, I should say, has been due to a, a pretty meaningful reduction in supply. This one, I, you know, our, our economic outlook on the freight side is that, yeah, the inflection has to come from supply. There's not enough to make us think that the demand is gonna be enough lift on its own. Thank you. Appreciate the time. Thanks. Thank you. Your next question comes on the line with Jason Seidl from TD Cowen. Please go ahead. Thank you, operator. Hey, gentlemen, how are you? Good. Doing well. So, you know, I know you weren't giving exact guidance, for the remainder of the year, but I guess, you know, given some of the gains that you guys have seen, with USX, and I guess, a gradual improvement in the marketplace, how confident are you that you're gonna be able to grow earnings in the back half of the year, excluding insurance? And then, I guess, just real quick, what percent of your, book of business gets repriced in the truckload, section on a quarterly basis? Yeah. Well, Jason, I appreciate the question. I would say that if we really felt like we had a really good read to speak on the second half, we would have done that through our guidance. So for now, we're just gonna stop with what we've given for the first two quarters in terms of guidance. Now, clearly, what you see is, you know, you see a range in the second quarter that's better than the first quarter. And so, you know, it would be safe to assume that we don't see... You know, we're not expecting a big drop off. We think the worst is behind us, but that's as far as I think we would feel comfortable to talk about that right now. As for what percentage of our business might turn over, I think with technology, it's become rather, it's rather easy for many of our customers to do what we call mini bids, which is, in essence, they fire off an electronic request for us to bid on a handful of lanes. And so we are bidding on freight, every single week of the year. Now, the majority of the network bids, if you will, is a, call it, mid to late November through, call it, April, with these awards largely materializing and before the end of the second quarter. It used to be, like, everybody fit in a pretty tight window there, and today, again, I think technology is a factor in that. It's not such an undertaking for them. It's kind of spread out. So I hope that helps. I hope that gives you a bit of a sense. So the majority of our incumbent business will be repriced over the first six months of the year. No, no, that's helpful. And has the duration of the contracts changed any, or have the shippers been pushing for longer contracts? You know, it depends on who feels like they have leverage in the market. And usually, they're agreed to for a certain amount of time. I will tell you that there are some shippers that are pulling forward bids that they normally would do later in the year, and they're pulling them from, call it June to February. You know, you can guess maybe what their motivation might be to do or what might drive that. And, you know, it sure seems like our customers expect that rates are gonna be up in the second half of the year. That's what the behavior is showing us. So it sometimes can change, Jason, is what I'm saying. Understood. Appreciate the time, as always. Thank you. Thank you, and your next question comes from the line of Jeff Kauffman from Vertical Research. Please go ahead. Thank you very much. Hey, guys. Two quick questions. A little more number detail. A big jump in insurance costs this quarter. Could you talk a little bit about what went on, on the insurance? Is this related to what happened in non-reportable? Is this something different? But, you know, it looks like that was up something in the neighborhood of almost $36 million-$40 million this quarter. Yeah. So, Jeff, no, that... You're right. I mean, that's related to the insurance business and the decision to exit that and, you know, just to try to fully accrue the claims that we have outstanding in this business, so we can run them out without seeing much of an impact in the 2024 results. So that would be the largest driving factor. All right. Can you help us understand, then? I know you said you're gonna be exited from the business at the end of 1Q. So was this $71 really a bit of a, a forward-looking charge where we're accruing liabilities and, you know, after 1Q, is that gonna be all we're gonna hear from insurance business, or are there gonna be some legs that occur after that, even though you've exited the business and have kind of closed that out? Yeah, you can't book forward liabilities. And so I think we looked at the claims development and how that had been growing over time, and took a more conservative approach at reviewing the potential growth and IBNR of the book of business, and that led to a higher accrual that we believe more accurately reflects what exposure we have today. We'll have-- You know, because we have to give certain notice to the insureds before we can cancel a policy, there is this run-out period. We have reduced exposure greatly already, and so I think there's pretty limited financial impact we'd expect in Q1. And then it's essentially running out the claims and closing out the outstanding liabilities over the next probably year or two. Okay, and then just one last clarification on that. So if I look at this as an unusual event, making a decision to exit a business, and I wanna try to segregate that from the operating activities of the business in the fourth quarter, what would that split of the $71.7 million be? Maybe I don't understand the question. How much, how much would it maybe been tied to, maybe a receivable or insur- or a software versus the claims? Is that what he's, you know- Is that what you're asking, Jeff? I'm asking, if we did not exit the business, what would that $71.7 million would look like operating-wise in the quarter? Yeah, yeah. We don't, we don't have that. We- Okay. We haven't differentiated. Yeah. All right. Yeah. Gentlemen, thank you. My pleasure. I'm good. Thank you, and your next question goes to the line of Chris Wetherbee from Citigroup. Please go ahead. Good afternoon. Maybe along a similar line, as you think about non-reportable ex insurance, and so if we kind of put that aside for the time being, can you sort of remind us how we should think about the cadence of that business as we go over the course of the year? I know there has been historically some seasonal work in there. But just give us a sense of what we should be thinking from a baseline perspective, because we've had insurance in there, on a look-back period. Yeah, so if you exclude insurance, it kind of—sometimes it depends on some seasonal projects, Chris. So we've got a warehousing business that slows in the Q, in Q4, and so you'll see a seasonal decline there. But it does ramp up in the, you know, in Q1, and is typically strong through the remainder of the year. If sometimes we do a trailer leasing project in Q4. If you're absent of that, then you see, you know, you don't see a lift there. Sometimes you can see a lift there. So there's—kind of sometimes depends on what activity you see there. I think once you get into Q1, it's relatively stable until you hit Q4, which you could see a drop or it could be stable. I hope that helped your question. It is from a seasonal perspective, and maybe any sense around magnitude, if we can maybe look back at 2023 and think about what the numbers actually look like. There's just some noise in there, so just trying to get a sense of level setting, what the earnings power of non-reportable might be going forward. Yeah, yeah. So, you know, I think if you look at 2023 and you pull out the insurance numbers, I mean, that probably gives you a decent idea of how that, you know, how that flows from a seasonality standpoint. Okay. All right, that's helpful. And then maybe just one on U.S. Xpress. You guys have talked about that and obviously some improvement there, turning profitable. I guess, as you think about where you are relative to the guidance you'd given us when you closed the transaction in terms of, you know, the potential accretion from it, the dollar of earnings, I guess, where are you in that process? Do you feel like you're on schedule, ahead of schedule, behind? Just kind of get a sense, because obviously the market has moved around a little bit too. So, Chris, you're breaking the rule of one question, right? But since it's late in the game, I'll answer this quickly, right? So I'd say, hey, we're ahead of schedule, especially on the cost side of the business, and we're encouraged with the fact that we've been able to make some progress on rate and sequential progress on rates from third to fourth without the help of the market. And so we feel well positioned that when the market does turn, that we'll be able to close the gap between a historic Knight-Swift OR to a U.S. Xpress OR, and certainly would be in line to achieve the dollar EPS accretion that we're targeting. All right. I appreciate the leniency. Thank you very much. Yeah. All right. All right. This will probably be our probably our last question here. Thank you. And your next question comes on the line of Scott Group from Wolfe Research. Please go ahead. Hey, thanks for squeezing me in. So I know we, the last two questions have just touched on this, but can you just maybe clarify for all of us, what was the total number of insurance losses in 2023? Yeah, I don't have that right on me. You know, it's a little bit skewed because it's a little apples to oranges when you look at some of what went into the 71.7 versus, you know, expenses or losses that we had in the other three quarters, but- Yeah, so Scott, it's about $125 million is where we ended for 2023. Now that and that's going to include some extra things, extra costs to you know prepare us here and as we exit the business. Yeah. Perfect. Super helpful. Okay, and then can I just—I wanna just try and understand the guidance a little bit better. So Q4 underlying $0.39, you're sort of telling us Q1 $0.39. I don't know that that's ever happened, where it doesn't go down, and then Q1 to Q2's got a, you know, a decent, you know, probably a better than normal step up, and it doesn't sound like you guys are counting on things to get a whole lot better yet. So I'm just trying to understand what's driving the much better than normal sequential, if we're not counting on better than normal sort of demand or pricing yet. Yeah, so, so a couple things, Scott. First of all, because I look at it the same way at times, and because your mind gets stuck in thinking we're just a truckload carrier, right? And also you're thinking that truckload carrier that has a, a nice fourth quarter. So we certainly didn't see the lift in the fourth quarter, and so we don't expect to say, take a, the same step down from Q4 to Q1. And then usually LTL, fourth quarter is not a great quarter for LTL. Usually, they see a little bit of a lift into Q1, which we'd expect. And then some of the non-reportable, excluding the insurance, like I mentioned, the warehousing business, you see that slow down meaningfully in Q4, and then that ramps back up into Q1. So there's some counter-seasonal businesses that we've layered into the model, which would mean you don't see the same volatility from Q4 to Q1. Okay, that makes sense. Thank you, guys. Thanks, Scott. Well, thanks, Ina, for helping moderate our call. Everybody, we appreciate you joining and your interest in our company. Enjoy your evening. Thank you. That does conclude our conference for today. Thank you all for participating. You may now disconnect.