Good morning and welcome to Landstar System's first quarter earnings release conference call. All lines will be on a listen-only mode until the formal question-and-answer session. Today's call is being recorded. If you have any objections, you may disconnect at this time. Joining us today from Landstar are Frank Lonegro, President and CEO; Jim Applegate, Vice President and Chief Corporate Sales Strategy and Specialized Freight Officer; Jim Todd, Vice President and CFO; Matt Dannegger, Vice President and Chief Field Sales Officer; Matt Miller, Vice President and Chief Safety Officer. Now I'd like to turn the call over to Mr. Jim Todd. Thank you, sir, and you may begin. Thank you all. Good morning and welcome to Landstar's 2025 first quarter earnings conference call. Before we begin, let me read the following statement. The following is a safe harbor statement under the Private Securities Litigation Reform Act of 1995. Statements made during this conference call that are not based on historical facts are forward-looking statements. During this conference call, we may make statements that contain forward-looking information that relates to Landstar's business objectives, plans, strategies, and expectations. Such information is by nature subject to uncertainties and risks, including but not limited to the operational, financial, and legal risks detailed in Landstar's Form 10-K for the 2024 fiscal year, described in the section Risk Factors and other SEC filings from time to time. These risks and uncertainties could cause actual results or events to differ materially from historical results or those anticipated. Investors should not place undue reliance on such forward-looking information, and Landstar undertakes no obligation to publicly update or revise any forward-looking information. I'll now pass it to Landstar CEO Frank Lonegro for his opening remarks. Thanks, JT, and good morning, everyone. We'd like to thank our investors and analysts for their patience with us as we've worked through the previously disclosed supply chain fraud matter resulting in the postponement of first quarter earnings. We will be sharing the details at a high level with you shortly. I'd also like to thank our BCOs and agents and all of the Landstar employees who support them every day. It was great to spend time with our BCO team in Louisville at the Mid-America Truck Show recently and to celebrate the success of our agent network in Hollywood, Florida, at our annual agent convention. The capability, resiliency, and level of commitment exhibited day in and day out by our network of independent business owners is unique in the freight transportation industry. Their adaptability and dedication to service for our customers in this highly fluid freight transportation backdrop is truly impressive. They are exceptional business leaders and key to driving the continued success of Landstar's business model. The 2025 first quarter presented a unique set of macroeconomic challenges with the inauguration of a new president and the uncertainties associated with aggressive U.S. trade and tariff policies. We continue to monitor the impact of tariffs and other federal trade policies on international trade relationships between the United States and many countries throughout the world, most notably China, Mexico, and Canada very closely. As a reminder, U.S.-Mexico cross-border revenue was approximately 11% of consolidated revenue during the 2024 fiscal year, while U.S.-Canada cross-border revenue was approximately 4% of consolidated revenue during the same period. Our direct exposure to freight to and from China is de minimis. Amidst ongoing challenges in the freight environment, compounded by a highly volatile federal trade policy, the 2025 first quarter included several important positive developments for Landstar. As noted in our earnings release, the number of loads hauled via truck exceeded the high end of our guidance issued in connection with our fourth quarter 2024 earnings release on January 29, 2025. This was the first time in at least 15 years where the number of loads hauled via truck in the first quarter exceeded the immediately preceding fourth quarter. Although it is hard to determine how much of our first quarter load count was related to efforts by shippers to get ahead of tariffs, we certainly saw this as a positive sign to start 2025. Notwithstanding the political and macro uncertainty thus far in 2025, our focus continues to be on accelerating our business model and executing on our strategic growth initiatives. In one continued major bright spot, I'm extremely pleased with the performance of Landstar's heavy haul service offering. We generated approximately $113 million of heavy haul revenue during the 2025 first quarter, or a 6% increase over the 2024 first quarter. This achievement was driven by a 3% increase in heavy haul revenue per load and a 3% increase in heavy haul volume. Turning more broadly to our core truckload service offering, the foundational work we invested in during 2024 puts us in a great position to leverage the freight environment when it eventually turns our way. We are also focused on our commitment to continuous improvement in the level of safety, service, and support we provide to our customers, agents, BCOs, and carriers each and every day. Turning to slide five, the freight environment in the 2025 first quarter was characterized by relatively soft demand, weather impacts, and readily available truck capacity. The impact of accumulated inflation remains a drag on the amount of truckload freight generated in relation to consumer spending. Truck capacity continued to be readily available, with small pockets of supply-demand equilibrium, and market conditions continued to favor the shipper amidst choppy conditions in the industrial economy. Considering that backdrop, Landstar's revenue performance was admirable in the 2025 first quarter, delivering top-line results within the top half of our first quarter guidance range issued on January 29. Our first quarter guidance called for the number of loads hauled via truck to be 7% below to 2% below the 2024 first quarter, and overall revenue per truckload to be 2% below to 3% above the 2024 first quarter. The actual number of loads hauled via truck in the 2025 first quarter was 1.2% below the 2024 first quarter, slightly above the high end of our guidance range. Actual revenue per truckload in the 2025 first quarter was 0.6% below the prior year quarter, comfortably within the lower half of the guidance range. As we previously indicated in our recent 8-Ks, earnings per share came in below the low end of the guidance we provided in conjunction with our 2024 fourth quarter earnings release, primarily for two reasons. First, as discussed in our earnings release issued earlier today and as previously disclosed in Form 8-Ks filed with the SEC on April 2 and April 25 of this year, during the last week of Landstar's 2025 first quarter, we identified a supply chain fraud relating to the company's international freight forwarding operations. This fraud matter does not involve our core North American truckload services. While investigation, remediation, and collection efforts continue, the 2025 first quarter results included a $4.8 million pre-tax charge or $0.10 per share relating to this matter. This charge reflects the total currently anticipated adverse financial impact to Landstar relating to this fraud, net of certain actual and anticipated recoveries, and before taking into account the cost of legal and other professional fees, as well as additional potential recoveries. This charge is reflected in selling, general, and administrative costs as bad debt expense. It is important to note we believe the inception of the fraud dates back to at least 2019. We have no evidence currently of any internal employee involvement. We have our arms all the way around the matter and are vigorously pursuing recoveries. The fraud was isolated to a single satellite agent office created through a unique arrangement dating back over 10 years. While this situation is very disappointing, Landstar leaders across accounting, finance, international sales, operations, and legal worked tirelessly over the past six weeks since we discovered the fraud to investigate this matter and secure both actual and probable future recoveries that reduce the impact from the approximately $20 million worst-case scenario we reported in the 8-Ks to the roughly $5 million we reported in the first quarter. Second, as previewed by the 8-K we filed on April 2, 2025, first quarter EPS also reflected highly elevated insurance and claims costs of 9.3% of BCO revenue. This amount of insurance and claims as a percentage of BCO revenue is well above the company's average historical experience of 4.9% from the 2019 fiscal year through the 2024 fiscal year, and, as will be discussed further by JT, is primarily due to cargo theft and truck accident adverse claim development. Absent the supply chain item and the elevated insurance and claims costs, our EPS would have finished comfortably within the 2025 first quarter prior guidance, even with the corresponding incentive compensation adjustments. Our balance sheet continues to be very strong, and our capital allocation priorities are unchanged. We will continue to patiently and opportunistically execute on our existing buyback authority to benefit our long-term stockholders. As noted in the release, we deployed approximately $61 million of capital toward buybacks and repurchased approximately 386,000 shares of common stock during the 2025 first quarter. In addition, we were excited to announce this morning the acceleration of the increase to our regularly scheduled quarterly dividend, resulting in an 11% increase over the amount of the company's regular quarterly dividend declared following each of the prior three quarters. We continue to invest through the cycle in leading technology solutions for the benefit of our network of independent business owners and have allocated a significant amount of capital this year toward refreshing our fleet of trailing equipment, specifically focusing on unsided platform equipment. Turning to slide six and looking at our network, the scale, systems, and support inherent in the Landstar model help to drive the operating results generated during the 2025 first quarter. JT will get into the details on revenue, loadings, and rate per load shortly. As noted during previous earnings calls, I've been in the transportation sector for most of my career and realized how important Landstar's safety culture is to our continued success. Our safety performance is a direct result of the professionalism of the thousands of Landstar BCOs operating safely every day and the agents and employees who work to reinforce the critical importance of safety at Landstar. I'm proud to report an accident frequency rate of 0.69 DOT reportable accidents per million miles during the 2025 first quarter, well below the last available national average DOT reportable frequency released from the FMCSA for 2021. We continue to be committed to driving down that number closer to the company's trailing five-year average of 0.61 or lower. This long-run average is an impressive operating metric that speaks to the strength, skill, talent, and dedication of our BCOs and provides a point of differentiation our agents are able to highlight in discussions with our freight customers. I'd also like to take a moment to recognize Landstar's nearly $500 million agents based on the 2024 fiscal year results. As mentioned earlier in the prepared remarks, it was our pleasure to celebrate their success in April at our annual agent convention. Importantly, retention within the million-dollar agent network continues to be extremely high. Turning to slide seven in the capacity side, on a year-over-year basis, BCO truck count decreased approximately 8% compared to the end of the 2024 first quarter. On a sequential basis, BCO truck count decreased in the first quarter from the 2024 fourth quarter by approximately 223 trucks, consistent with our expectations of BCO truck declines continuing into the first quarter. I would remind folks, however, that the first quarter is historically the most challenging quarter from a net truck count standpoint. Going back in history, in the aggregate, during the first quarter of every year over the last 15 years, we have added a total of 10,445 BCO trucks and had a total of 11,412 BCO trucks depart Landstar. It is typical to incur turnover in BCO truck count in a low rate per load environment. BCO turnover continues to be influenced by the significant increase in the cost of maintained and operated truck today compared to before the pandemic. Directionally, we are pleased to see our trailing 12-month truck turnover rate drop from 34.5% as of fiscal year end to 33% at the end of the 2025 first quarter. Through the first six weeks of the 2025 second fiscal quarter, the number of trucks provided by BCO independent contractors has declined by less than 20 trucks. If that trend continues through the final seven weeks of the quarter, it will be the best quarter-over-quarter net truck performance in 12 quarters. I will now pass the call back to JT to walk you through the 2025 first quarter financials in more detail. Thanks, Frank. Turning to slide nine, as Frank mentioned earlier, overall truck revenue per load decreased 0.6% in the 2025 first quarter compared to the 2024 first quarter, primarily attributable to a 2.1% decrease in revenue per load on loads hauled by truck brokerage carriers, partially offset by a 1.5% increase in revenue per load on loads hauled by BCO independent contractors. Revenue per load on loads hauled by truck brokerage carriers was negatively impacted by a year-over-year decline in diesel prices. Overall truck revenue per load in the 2025 first quarter was negatively impacted by a 1% decline in average length of hauls compared to the 2024 first quarter. On a sequential basis, truck revenue per load decreased 4.6% in the 2025 first quarter versus the 2024 fourth quarter, slightly softer than the typical pre-pandemic normal seasonality decline of 3%. In comparison to overall truck revenue per load, we consider revenue per mile on BCO loads hauled by BCO trucks a pure reflection of market pricing, as it excludes fuel surcharges billed to customers that are paid 100% to the BCO. In the 2025 first quarter, revenue per mile on unsided platform equipment hauled by BCOs was 14% above the 2024 first quarter, and revenue per mile on van equipment hauled by BCOs was 2% above the 2024 first quarter. Delving deeper into seasonal trends, revenue per mile on loads hauled by BCOs on unsided platform equipment declined 9% from December to January, was approximately flat January to February, and increased 1% from February to March. The December to January decline underperformed pre-pandemic seasonal trends, while the February and March trend was generally in line with pre-pandemic historical trends. With respect to loads hauled by BCOs on van equipment, performance versus pre-pandemic typical seasonal patterns was choppier. Revenue per mile on van equipment hauled by BCOs increased 1% from December to January, outperforming these trends, decreased 3% from January to February, underperforming these trends, and decreased 1% from February to March, again underperforming. It should be noted that month-to-month seasonal trends on unsided platform equipment are generally more volatile compared to that of van equipment. This relative volatility is often due to the mix between heavy specialized loads and standard flatbed volume. As Frank alluded to, we've experienced strong recent performance in our heavy haul service offering. Heavy haul revenue was up an impressive 6% year-over-year in the first quarter, significantly outperforming core truckload revenue. Heavy haul loadings were up approximately 3% year-over-year, and revenue per heavy haul load increased 3% year-over-year. This represented a mixed tailwind to our unsided platform revenue per load as heavy haul revenue as a percentage of the category increased from approximately 31% during the 2024 first quarter to approximately 33% in the 2025 first quarter. Non-truck transportation service revenue in the 2025 first quarter was 8% or $6 million above the 2024 first quarter. The increase in non-truck transportation revenue was mostly due to a 14% increase in ocean revenue per shipment and a 19% increase in air revenue per shipment, partially offset by a 23% decrease in intermodal revenue, primarily driven by a 10% decline in revenue per load and a 14% decline in loadings. Turning to slide 10, we provided revenue share by commodity and year-over-year change in revenue by commodity. Transportation logistics segment revenue was down 1% year-over-year on a 1% decrease in loadings, while revenue per load was approximately flat compared to the 2024 first quarter. Within our largest commodity category, consumer durables, revenue increased 2% year-over-year on a 5% increase in revenue per load, partially offset by a 3% decrease in volume. Aggregate revenue across our top five commodity categories, which collectively make up about 69% of our transportation revenue, was approximately equal to the 2024 first quarter. While slide 10 displays revenue share by commodity, we thought it would also be helpful to include some color on volume performance within our top five commodity categories. From the 2024 first quarter to the 2025 first quarter, total loadings of machinery increased 6%. Automotive equipment and parts decreased 15%. Building products increased 1%, and electrical increased 36%. Additionally, substitute linehaul loadings, one of the strongest performers for us during the pandemic and one which varies significantly based on consumer demand, increased 24% from the 2024 first quarter. As we've mentioned many times before, Landstar is a truck capacity provider to other trucking companies, 3PLs, and truck brokers. During periods of tight truck capacity, those other freight transportation providers reach out to Landstar to provide truck capacity more often than during times of more readily available truck capacity. The amount of freight hauled by Landstar on behalf of other truck transportation companies is reflected in almost all of our commodity groupings, including our substitute linehaul service offering. Overall revenue hauled on behalf of other truck transportation companies in the 2025 first quarter was 13% below the 2024 first quarter, a clear indicator that capacity is readily accessible in the marketplace. Revenue hauled on behalf of other truck transportation companies was 12% and 14% of transportation revenue in the 2025 and 2024 first quarters, respectively. Even with the ups and downs in various customer categories, our business remains highly diversified, with over 23,000 customers, none of which contributed over 7% of our revenue in the 2025 first quarter. Turning to slide 11, in the 2025 first quarter, gross profit was $98.3 million compared to gross profit of $113.9 million in the 2024 first quarter. Gross profit margin was 8.5% of revenue in the 2025 first quarter as compared to gross profit margin of 9.7% in the corresponding period of 2024. In the 2025 first quarter, variable contribution was $161.3 million compared to $168.2 million in the 2024 first quarter. Variable contribution margin was 14% of revenue in the 2025 first quarter compared to 14.4% in the same period last year. The decrease in variable contribution margin compared to the 2024 first quarter was primarily attributable to a mixed headwind, as the number of loads hauled by BCOs decreased quarter-over-prior-year quarter by approximately 7%, slightly better than the quarter-over-prior-year quarter decline in the average number of trucks provided by BCO independent contractors of 9%, given the 2% improvement in BCO utilization over the same time period. Whereas the number of loads hauled by truck brokerage carriers increased approximately 3% compared to the prior-year quarter. Turning to slide 12, operating income declined as a percentage of both gross profit and variable contribution, primarily due to, one, highly elevated insurance and claim costs of 9.3% of BCO revenue; two, the $4.8 million charge related to the previously disclosed freight forwarding supply chain fraud matter; and three, the impact of the company's fixed cost infrastructure, principally certain components of selling, general, and administrative costs in comparison to smaller gross profit and variable contribution bases. The highly elevated insurance and claims costs drove an approximately $0.31 unfavorable variance as compared to the estimated amount included in the 2025 first quarter prior guidance, while the freight forwarding supply chain matter reduced first quarter EPS by approximately $0.10. Other operating costs were $11.8 million in the 2025 first quarter compared to $14.9 million in 2024. This decrease was primarily due to a decreased provision for contractor bad debt and increased gains on sale of used trailing equipment. Insurance and claims costs were $39.9 million in the 2025 first quarter compared to $26.3 million in 2024. Total insurance and claims costs were 9.3% of BCO revenue in the 2025 first quarter compared to 5.8% in the 2024 first quarter. The increase in insurance and claims costs as compared to 2024 was primarily attributable to increased net unfavorable development of prior-year claim estimates, increased severity on cargo claims, primarily due to cargo theft and carrier impostor scams, and increased severity of trucking accidents during the 2025 period, partially offset by decreased BCO miles traveled during the 2025 period and a decreased frequency in cargo claims as compared to the 2024 period. During the 2025 and 2024 first quarters, insurance and claims costs included $11.4 million and $1.1 million of net unfavorable adjustments to prior-year claim estimates, respectively. Selling general and administrative costs were $61.6 million in the 2025 first quarter compared to $56.4 million in the 2024 first quarter. The increase in selling general and administrative costs was primarily attributable to the $4.8 million charge related to the supply chain fraud discussed earlier in the call by Frank. Excluding the impact of the charge for the supply chain fraud, selling general and administrative costs were essentially flat as compared to the 2024 period. Depreciation and amortization was $12.2 million in the 2025 first quarter compared to $14.1 million in 2024. This decrease was primarily due to decreased depreciation on software applications. The effective income tax rate was 24.7% in the 2025 first quarter compared to an effective income tax rate of 23.5% in the 2024 first quarter. The increase in the effective income tax rate was due to the favorable impact of net excess tax benefits from stock-based compensation arrangements during the 2024 period. Turning to slide 13 and looking at our balance sheet, we ended the quarter with cash and short-term investments of $473 million. Cash flow from operations for the 2025 first quarter was $56 million, and cash capital expenditures were $2 million. The company continues to return significant amounts of capital back to stockholders, with $83 million of dividends paid and approximately $61 million of share repurchases during the 2025 first quarter. The strength of our balance sheet is a testament to the cash-generating capabilities of the Landstar model. Back to you, Frank. Thanks, JT. Given the highly fluid freight transportation backdrop amid the uncertain political and macro environment, together with the recent industry trends in insurance and claims costs, the company will be providing second quarter revenue commentary rather than formal guidance. As we are already a couple of weeks into fiscal May, we thought it would be helpful to provide some insight into April business activity. The number of loads hauled via truck in April was approximately 2% below April 2024, while revenue per load in April was approximately 1% above April 2024. As a result, we view April's truck volumes as slightly below normal seasonality, where April truck revenue per load was slightly ahead of normal seasonality. It should be noted that the launch point of the first quarter from a sequential volume perspective was relatively high, given the anomaly of 2025 first quarter truck loadings exceeding 2024 fourth quarter truck loadings. Looking at historical seasonality from Q1- Q2, pre-pandemic patterns would normally yield an 8% increase in the number of loads hauled via truck and a 2% increase in truck revenue per load, yielding a higher top line sequentially. As noted above, fiscal April truck volumes trended slightly below normal seasonality. When combined with the potential negative impact of truck transportation activity resulting from tariff and trade uncertainty, we believe it is unlikely that we would achieve normal seasonality with respect to the number of loads hauled via truck in the 2025 second quarter. With respect to variable contribution margin, the company typically experiences a 30- 40 basis point sequential compression in variable contribution margin from the first quarter to the second quarter. Turning to slide 15, although we are not providing guidance, there are a few points regarding the 2025 second quarter we want to bring to everyone's attention. As discussed earlier in the call, while investigation, remediation, and collection efforts continue with respect to the supply chain fraud matter, the $4.8 million pre-tax charge we incurred in the 2025 first quarter reflects the total currently anticipated adverse financial impact to Landstar, net of certain actual and anticipated recoveries. Other than additional costs for legal and other professional fees relating to this matter, we do not expect significant additional charges during the 2025 second quarter or thereafter relating to this matter. 2025 second quarter SG&A will include our typical $2-$3 million charge relating to our annual agent convention. Finally, in connection with a multi-year excess liability reinsurance program maintained by Landstar, a no-claims bonus of $12 million became payable to Landstar in April 2025. As certain claims relevant to this excess liability program remain pending, it is anticipated that the receipt of this no-claims bonus payment will be recorded on our balance sheet in the second quarter as a deferred gain until such time as all underlying claims with exposure under the applicable excess layer insurance arrangement are resolved. With that, operator, we'd like to open the line for questions. Thank you very much, sir. At this time, we will begin the question and answer session. If you would like to ask a question, please press star one on your touchtone phone. Once again, that is star one to ask a question. To cancel your request, please press star one and then the number two. Our first question comes from Jordan Alliger from Goldman Sachs. Your line is now open. Yeah, hi. Morning. Just wondering if you could talk a little bit more about the insurance and the insurance developments. I do not know if you could pinpoint, like, I know you gave sort of the unfavorable variance, but how much of these prior-period claims, you know, the actual dollar amount, sort of like maybe one-time in nature. How do you think about sort of what is normal for insurance going forward, just because it seems like these types of things recur frequently? Thanks. Yeah, hey, Jordan, thanks. Obviously, it is an industry phenomenon, not just a Landstar phenomenon. I would say, and you will see it in the 10-Q a little bit later today, but the year-over-year difference in prior-year development was significant, like $10 or $11 million. JT, you will get into the details. I do think it was a unique quarter. I mean, our normal run rates, you know, just below 5% of BCO revenue on that insurance and claims line. There's always some prior-year development in that line, but this was a pretty unique quarter for us. JT? Yeah. Good morning, Jordan. To Frank's point, of the $11 million unfavorable development in the 2025 first quarter, about $7 million came from our cargo programs. We had two incidents in the 2024 fourth quarter that were not reported until the 2025 first quarter. Very timely. I think Courtney Reagan did a nice job on Friday on CNBC, a special on freight fraud in the supply chain. It's impacting Landstar. It's impacting the entire industry. I'll let Matt Miller talk about some of the things we're doing from a technology and a people standpoint. You know, 2023 full-year insurance as a percent of BCO revenue was 570 basis points, Jordan. It stepped up to 630 in the 2024 fourth quarter. We're working on a lot of things, as evidenced by the decrease in cargo claims frequency. It's just when these folks are hitting, they're hitting on high-value loads, as evidenced. I think our severity on cargo claims was up something like 155% year-over-year in the 2025 first quarter. Matt? Yeah, thanks, Jim. Thanks, Frank. We are seeing a decrease in the frequency, but as Jim alluded to, an increase in severity. That really speaks to the sophistication of the networks and the bad actors out there. We've seen that happen from 2023- 2024. Courtney Reagan, I agree with Jim, did a really nice job going into detail about what's really going on in the space. That said, we're investing significantly. We stood up a fraud department and continuing to add people to that, subject matter expertise to that. We're educating our constituents out there, whether it's the agents or the capacity. We're investing in technology. We've stood up various vendors that are helping us attack on really all fronts, whether it's people, education, or technology. This is an area where you got to remain vigilant, and you're really always playing defense here. Just as a quick follow-up, then, I'm realizing that these things pop up and I get the severity. Is there a way to think about the baseline% of BCO revenue going forward, you know, just like if it was a normalized number? Thanks. Yeah, that was a bit difficult just given the environment that we're in. You know, I think that the historical run rate that we mentioned in the prepared remarks of 4.9%, given the current environment, is probably low. I look at the first quarter result in the, you know, 9-9.5% range, and to me, that's high. One of the things that happened in the 2025 first quarter, as JT mentioned, you know, usually these are short-cycle events where you find out pretty quickly that there's something that's happening. In the couple of incidents that JT mentioned, we didn't find out, you know, for 30, 60, 90 days in some cases. It was a little surprising. There have been arrests in one of these particular incidents that we're alluding to. I see that as a good thing. It is going to take not just the industry and the people in the process and the technology that Matt mentioned, but also a fair amount of government help. I do think the fact that CNBC came out with their piece on fraud, I do think that's going to help elevate the concerns of the industry. It's not just in trucking. I mean, good Lord, it's happening in, you know, in rail and in intermodal and in shipping and in truck transportation as well. This is something that we collectively need to get our arms around, and we are going to need government help to get there. Thank you. Thanks, Jordan. Thank you. Our next question will be from Jason Seidl of TD Cowen. Your line is now open. Thanks operator. Hey, Frank and team. Good morning. Wanted to dive in a little more on the heavy haul. Obviously, loads, volumes up 3%. Seems like a pretty decent result for the quarter. I wonder if you could break out sort of the end markets within heavy haul that are doing better for you guys. And then I have a follow-up. Yeah, sure thing, Jason. You know, heavy haul has been a bright spot for us, you know, pretty much since we designated it as a strategic area of focus. It's nice to see an area where we have, I think, a competitive advantage. We have a lot of legacy. We've got some great agents and some internal folks. We hired somebody from the outside who is an industry expert in heavy haul. Rob Simon is his name. You'll hear his name from time to time on these calls as we continue to improve the service offering there and the BCOs who are capable of doing this and approaching customers who have that as maybe not the mainstay of their business, but certainly a piece that we can participate in. As you know, Jim Applegate has got this heavy haul area, so let me let him provide some commentary on the end market question you had, Jason. Yeah. And Frank, how are you doing, Jason? From a heavy haul standpoint, to Frank's point, we've really leaned into this whole area, and we're engaging our agents. We've got additional resources over within our corporate office to kind of help them work through the opportunities. We've got a dedicated sales focus. Our growth in that area has actually been pretty broad-based. We've got, you know, machinery, electrical, building products, the energy industry. You know, we're kind of seeing it in multiple areas with multiple customers. We view this as a bright spot here, not only, you know, from 2024. I think it's carried over here into 2025, and our pipeline is very strong. To Frank's point, we're a very strong player in this market, and it seems like the end markets are really kind of turning in our favor, and we've got the right support system to make sure that we grow. I appreciate that color, guys. Wanted to switch over to sort of the new requirements, or I guess the requirements that were brought back for English proficiency for CDL operators. Wanted to get sort of your thoughts on how that would impact the overall driver supply market, not only in sort of enforcement, but also in maybe new CDL applicants going forward. Yeah, Jason, great question. I'll let Matt chime in here in a second. I mean, the good thing is that we don't expect any impact on our BCO fleet. Our standards here are extremely high, as you might imagine. Our qualification process, our orientation process, certainly fair to tell folks who are unable to comply with that federal requirement. I don't think that every company is as stringent as we are. I think it is going to impact capacity in what I'll say is a favorable way for the industry and certainly for Landstar. I think we're going to see that in a couple of different ways through, you know, standard road checks, but also in the use of what we call B1 visa folks who were previously anyway involved in a lot of cross-border business. I do think it's going to be an overall positive for us, but Matt can fill in the gaps here. Sure. I appreciate the question. You know, this relates to the executive order on English language proficiency that Trump's put out April 28, and that was followed May 1 by CVSA indicating that English language proficiency was going to be considered an out-of-service, you know, criteria. That's really the big change here. English language has been required. It's the out-of-service element here that can impact shippers as well as the drivers when they're out there on the road. Really the big question that we have is the enforcement guidance. We are waiting on FMCSA. They have about 60 days to put out guidance in terms of enforcement for law enforcement. We have heard upwards of 100,000 drivers could be impacted. That is an industry number. That is not my number that we have heard. I just recently got back from Laredo, and there is a lot of chatter down there about those B1 visa drivers and a large preponderance of them using the various apps, right? Apps to translate. How does that enforcement translate the use of those apps? Are those folks out of service? That could have a meaningful impact to overall capacity. I appreciate that color, guys. Appreciate the time as always. Thanks, Jason. Thank you. Next is John Chapell of Evercore ISI. Your line is now open. Thank you. Good morning. I'm going to stick with the capacity team. Frank, start with you. Obviously, the BCO count's been kind of in the crosshairs, and it sounds like this quarter the trends remain the best quarter over quarter in 12 months. Sorry, 12 quarters. Looking at slide 7, the total truck brokerage carriers leapt up about 15% quarter over quarter, over 10% year over year. Can you maybe explain what's going on there and what that may be indicative of in the broader industry capacity landscape? Yeah, good question, John. And on the BCO count, yeah, we are actually pretty excited about the trends that we've seen in April and even more so in the first couple of weeks of May. I'll let Matt cover that one. You are right. There has been an uptick on the capacity side, the third-party capacity side. There are reasons behind that. Also, you know, given the question that Jason just asked and Matt's excellent answer, I mean, I do think that capacity number is probably going to come down, but let Matt fill in the gaps. Sure, sure. That is a great point. It did jump about 10,000 carriers. That really relates to our partnership with an industry-leading vendor on the carrier vetting and oversight. They are partnered with many other carriers or brokers, I should say, in our space. Therefore, we got access to more approved carriers that qualify for our criteria as a result of that implementation, which took place in the first quarter. That said, this is going to give us the ability to become more and more selective with those that we do business with as it relates to fraud, as it relates to really choosing those high-quality carriers to partner with. I would expect those numbers to come in in the second and third quarter as we look ahead and we become more selective going forward. On the BCO side, I would really echo what Frank said on his remarks. We went from, on the retention side, a high watermark fourth quarter of 2023 at 41%. We have seen this is our fifth quarter of improvement there where we are sitting at 33% now at the end of the first quarter. Long-term average is 29%. We are much closer to that long-term average than we are to that high watermark. As Frank alluded to, fewer than 20 net truck losses in the first six weeks of the second quarter is a trend that we like. Should that move forward, we would have, as Frank said, the trend could be the best in the most recent 12 quarters. On the ad side, love to see a little bit more help on rate. We're focusing on what we control, what we can control, improvements to recruiting, improvements to qualifications, improvements to orientation, all of those things without sacrificing safety. Safety is one of those things that we view as a big diversifier for us, a big differentiator, I should say, not different diversifier, a big differentiator. We're not going to sacrifice safety. The model is proven in a good environment, we're able to add trucks in a meaningful way. We added net trucks in 2021, roughly 870 net truck ads in 2021, roughly 750 net truck ads in 2020, roughly 900 net truck ads in 2018, and 500 net truck ads in 2015. The model has the ability to lend itself to us adding net trucks in a meaningful way given a favorable environment. Great. That is really helpful, Matt. My follow-up was going to be to Jim Applegate, but maybe stick with you, Matt, or either one. Just overall capacity, you know, it was noticeable to me both Frank and Jim Todd in the prepared remarks used the phrase readily available. I know there is a lot of hope that English proficiency is going to, you know, cull a lot. I was thinking before this weekend, there was probably some hope that recession would help cull a lot of this excess capacity. Do you have any estimate on what the overcapacity is in the market and when do we go and what does it take to get from readily available to balance? Yeah. Hey, John, good follow-up. You know, you can look at the FMCSA databases, and it's going to give you a view, but not a perfect view of what's happening. Part of the reason is you don't actually know how many trucks are associated with those authorities. We are continuing to see capacity come out. I think the fact that we are, I'm going to say bottoming, but it's obviously there's a lot of uncertainty still out there, but the fact that our trends have improved meaningfully from Q1- Q2 and even from April to May. Now, some of that is the good work that Matt and his team are doing to improve all of the qualifications and the recruiting. You know, a little bit of hope of better rate obviously keeps people in the game, which we saw when we entered into the year. I mean, we had a good feeling about the year, and then obviously a fair amount of uncertainty got injected, you know, through the tariff and trade policy. Look, I think we are getting there. I do not think we are all the way there. The first thing we are going to see are pockets. My guess is if there is real enforcement on English proficiency, you are probably going to see, you know, that equilibrium achieved in, you know, Texas and places like that, perhaps Florida, perhaps Southern California, places that are border-ish related. You are going to see impacts there probably first. That will give you an indication that we are nearing that. Great. Thanks, Frank. Thanks, Matt. Thank you. Our next question will be from Daniel Imbro of Stephens Inc. Your line is now open. Yeah. Hey, good morning, guys. Thanks for taking our questions. Morning, Daniel. Frank, I wanted to start maybe a little bit more near-term focus. I think in the slides that you offered a little bit on April and what normal seasonality looks like, but in your prepared script, I think you said you expect maybe below normal sequential movements in loads from April to May. I guess can you just walk through a little more detail kind of where you're seeing any relative strength or weakness? I think automotive was a big weak category in Q1. And just what can you lean into to outgrow the market during this continued malaise on the demand side as you look across the portfolio? Yeah. Hey, Daniel, good set of questions. I'll let JT get into the specifics on a kind of line-by-line basis. We went through a fair amount of it on the prepared remarks. But to your point, I mean, automotive, given the tariff overtones and the fact that rates spiked up a little bit, meaning interest rates spiked up a little bit, you know, during the quarter, that was not our friend. The impact of tariffs in Mexico or on Mexico products coming across, that obviously did not help us either. I would say the, you know, the automotive piece was a bit of a drag. U.S.-Mexico cross-border more broadly was a bit of a drag, as was U.S.-Canada. The things that were tariff impacted clearly impacted us as well. You know, the fact that, you know, we saw some better numbers in April, I mean, that felt pretty good, but it also had a fair amount of nuance in there as well. We did see the U.S.-Mexico business do a little bit better in April, but we saw the U.S.-Canada business do a little worse. I think the thing that we need to focus on are the areas that we have the most control over. Clearly, that is getting the BCO count where it needs to be, doubling down on the strategic areas of focus. The investments that we have made in Laredo and other places along the border for U.S.-Mexico trade are the absolute right investments for the long term. The short term, obviously, is going to get impacted by tariffs as well as where the automotive business is. When that comes back, we are very well situated to do a good job there. I think, you know, what you are seeing is the heavy haul business doing well, the overall platform business doing pretty well. You're seeing all the data center and the power and things like that doing well for us. There is a lot of bright spots in there, but you got to put it in the context of all the rest of the business. There are some areas that are doing well and some areas that are not. JT? No, I think that's fair, Frank. Daniel, to your question on seasonality, April typically drops off about 260 basis points on a loads per workday. We finished April at down 540. That is what is driving April volumes 2% below prior year April when we were down 1.2% year over year in the first quarter. To Frank's point, our U.S.-Mexico business was down 9% year over year in the first quarter through the first six weeks of the second quarter. It's basically been cut in half to where U.S.-Mexico revenue was only down 5% year over year. Great. And then if I could just say from our follow-up, just sticking on the 2Q kind of outlook. I know, JT, you're not going to give a 2Q with the EPS guide, but I guess what are the puts and takes maybe if you walk through the expenses? You know, incentive costs, I think you talked about how those should trend. Frank mentioned $2 million-$3 million from the agent convention. Maybe insurance steps down given these, but not sure with the claims. Just anything to help us bridge kind of operating expenses from 1Q- 2Q would be helpful. Why don't we walk you down just a little bit more than what's in the slides? Because it's important for us to give you as much commentary as we can. We're not trying to set guidance. We're not trying to give you, you know, a set of boundaries that you're going to take the midpoint of. You know, as we entered the year, we did see some early signs of a recovery. And that was, you know, that was a pretty good environment. We're excited about the year. Looking at Q1, absent insurance and claims, we would have hit our guidance. We felt really good about the core operating performance of the business. You know, mid-quarter, post-inauguration, we encountered the unprecedented tariff and trade environment that you all are very familiar and very well briefed on because we saw that in the impacts on Mexico and Canada, as we mentioned. Even though the direct U.S.-China exposure is limited, we probably did benefit somewhat in the first quarter from pull forward. We do not know how much of that. I think the concern we have is, will there be an air pocket in the, you know, the blank ships and things like that? You know, the impact of that on demand for trucking, but also on supply. If there is more supply because there are fewer loads coming off of import-export, then that obviously, you know, is impactful to us. Counterbalanced by the English proficiency that we talked about earlier. I think all that aside, and I will put a huge caveat that we are not giving Q2 guidance. I think at our current course and speed and subseasonal volumes, I would expect us to finish above Q1 revs, but below Q2 2024 revs. That gives you a fairly wide range, but I think that is where we are trying to guide you toward. On variable contribution margin, we finished at 14% in Q1. We would generally see a 30-40 basis point decline in that from a sequential perspective. If we are going to be subseasonal on volumes, we might end up a little bit better than that, down 30, down 40. JT's got a bunch on the expenses, so let me let you hit that. No, all fair. On other operating costs, Daniel, Matt and the team did a really nice job in the first quarter, $800,000 gains on disposal. If that pace is not achieved in the second quarter, you could have some modest uptick on other operating costs sequentially. Insurance, you know the deal there, the trend has not been the industry's friend. 93 is a high watermark in first quarter of 2025. Hope to beat that in the second quarter. On G&A, really the big one, Daniel, is the 48 falling off and then potentially $2.5 million-$3 million coming on board. I know you were with us first week in April at convention. Depreciation, I do not anticipate anything significant sequentially one queue to two queue. On the question around incentive compensation and stock compensation, we had about $3 million included in the first quarter of 2025 on those lines. I would expect if our overall expectations play out in the second quarter, I would expect a similar charge reflected in second quarter SG&A. Great. Really appreciate all the color. Thanks, guys. Thanks, Daniel. Thank you. Our next question will be from Brian Ossenbeck of JP Morgan. Sir, your line is now open. Hey, good morning, guys. Thanks for taking questions. Maybe it is a very near-term one. We have road check going on this week, right? Maybe, Matt, you can talk about expectations for that. Will we see any sort of, and it does not sound like FMCSA has their guidance out there, but could we actually see some sort of out-of-service impact from all this language proficiency focus? Yeah, appreciate the question, Brian. I do not think just yet we are going to see anything too meaningful until we get that guidance, that enforcement guidance. I have not heard or seen from anybody that is indicating we will see any elevated enforcement just yet. Yeah, Brian, these are going to be judgmental until we get the guidance. My guess is it is going to have to be a blatant, you know, non-English proficiency in order for somebody to be taken out of service. I think this is a good barometer of whether there are truly folks out there who, you know, are very sub-proficient in English. It remains to be seen, but we will certainly keep an eye on that one. All right. Makes sense. And then just more broadly, you know, you talked about all the puts and takes and pull forward, which is quite difficult to pull apart and to figure out what is actually going on. But maybe, Frank, is there a possibility that we could see maybe an acceleration here in the short term as we have another 90-day window with a lot more clarity? Maybe if you did not pull forward, you will. If you already did, you do some more. Are you hearing or seeing anything along those lines across the different verticals and maybe even across the geographies as you look at the cross-border? Yeah, with 36 hours post the 90-day pause, nothing yet. Look, academically, in the first quarter, it's hard to believe that we didn't see something associated with pull forwards. My guess is if the 90 days continues to progress and people become more and more worried that maybe there won't be a deal, my guess is there will be some people who try to get things across the finish line before the 90 days expires. Academically, I see your point and can certainly support it. It's just hard in this early going to actually put some numbers behind that. Right. Understood. Okay, guys, thanks for your time. Thank you, Brian. Thank you. Our next would be Scott Group of Wolfe Research. Your line is now open. Hey, thanks. I know, Frank, you were talking about just like the uncertainty with these blank sailings and weaker imports. I'm wondering, are you seeing that in your volume yet? Meaning, if April was down 2% on volume, is May meaningfully different than that? Yeah, let me hit the high level and then I'll let JT talk the specifics on May. You know, when you look at the sale time, and you know this probably better than anybody, Scott, I think the sale time measured depending on your port could be, you know, four, five, six, seven weeks depending on where you're sailing from and where you're sailing to. I don't think we have seen the blank ships coming in, so to speak. That obviously is going to hit us at some point in time. The nice thing is we don't have a ton of direct exposure to China import-export. We have a little bit in the international business. It is hard to figure out whether or not we participate in any, you know, any meaningful consolidation in the 53-footers, you know, after they get to inland ports. My guess is it is some, but it is probably quite small. There is going to be some pocket. The question to Brian's point a question ago is, are we going to see that counterbalanced by any pull forward associated with the expiration of the 90 days? Let me let you hit April, May. Yeah, through the first two weeks of fiscal May, truckloads per workday, Scott, are running almost right on top of fiscal April such that we are clipping about 20 basis points ahead of prior year May. I would just remind folks, last year, May 2024 dipped truck loadings versus April, which is unusual. That's why the slight improvement versus the down 2% year over year in April. Okay. That's helpful. I know it's a small part of your business, but just curious, the ocean and air segment, like had a lot of growth in Q4 and Q1. Has that, you know, what you're seeing more in real time there would, I'm just curious. You're talking about in terms of Q1, Q2 trends, Scott? Yeah. Yeah, obviously rate was a huge positive for everybody in that space in the preceding handful of quarters as that ticked up. JT's just pulling up a couple of numbers here that hopefully be able to help you out as we think about last year and this year. Yeah, so we've definitely seen our ocean revenue per shipment slide on a sequential basis, Scott, from running a little bit over $11,000 in the fourth quarter of 2024 down to, if I was good with numbers, about $7,500 an ocean load in first quarter 2025. While it was still positive year over year in the first quarter, we are seeing that sequential slide. Okay. If I could just ask one just bigger picture question. It sounds like hopefully the BCO declines are starting to moderate. Do you think, is there anything about this that in any way feels structural to you where when we get an upcycle at some point, we're not going to see a big uptick in BCOs, or is this purely a cyclical dynamic and when the cycle turns, we'll get all the BCOs coming back and we'll get all the volume growth back? Yeah, Scott, I don't see anything structural. I mean, obviously we've been looking at BCO count extremely heavily here in the last, certainly since I've been here, and I'm sure the team before as things started to roll over in the early part of 2022. I think, and we've mentioned this before, just the sheer length of time associated with this freight recession, it really is unprecedented. You know, we always go back and look at history and say, well, what if this recession had only been 18-20 months like prior ones? I think we would have snapped a line of like 10,000 trucks. That would feel pretty good. We should expect capacity, not just at Landstar, but more broadly to continue to bleed out as the rate environment bounces along the bottom. That does not really surprise us. The fact that we are seeing, you know, continuing to see a significant number of adds on a quarter-over-quarter basis. Matt, you may have the numbers for Q1. I just happen to remember the numbers from Q4. In Q4, we added 500 trucks, but we lost 700 trucks. So the fact that 500, you know, new folks are coming to us tells us that the model is quite sound and quite resilient. And when things go the other way for us, the positive way, then you're going to see more adds than cancels because in a rising rate environment with a percentage pay model, more people are going to want to stay in a rising rate environment than they do in a declining environment. So Matt, quarter one? Yeah, quarter one was 568, so up 12% sequentially, Q4- Q1. Yeah, so we're continuing to add significant trucks, which tells me it's as much about continuing to see that number increase in a positive rate environment as well as more people wanting to stay. So it's both sides of the equation. Matt's doing a really good job of digging into all of this and looking not just at how we add more, you know, fully qualified folks, but also how we improve retention through all the work that we're doing on, you know, safety, security, service, what we call the CABS class, securement training, all of the things that are really good. Ultimately, the agents getting the best loads that are out there, as you all know, we generally don't, you know, play the bottom of the freight pie. It is important for us to continue to get the right business for the BCOs to haul. Thank you, guys. Super helpful. Thank you. Next question will be from Ravi Shanker of Morgan Stanley. Sir, your line is now open. Great. Thanks. Morning, everyone. Just to follow up on the cargo set topic, I was struck by your comment. I think Matt said that this is a topic where we probably play more defense than offense at this point. How many quarters do you think will it take to get in front of it? What are some of the tech tools are you using? Are there any kind of AI-type applications you can use to maybe predict some of this? Also, in the meanwhile, like what recourse do you have? Can you work with some of your customers, maybe share some of these losses? Is this something that insurance will even consider? Because in our conversation with insurance analysts, it does not feel like cargo theft and claims is a huge topic for them relative to maybe some of the accident claims here. Yeah. Hey, Ravi. A couple of good thoughts inside of that. I think that, you know, the theft environment, similar to cybersecurity, like you're always going to be on some level of defense, given the fact that the attack vector, so to speak, always is changing. As you put up better defenses, people try to find a way around those. Matt mentioned, and I'll reinforce, the technologies that we are investing in, both as an industry through some of the vendors that we all do business with, as well as some of the things we're working on internally, do in fact utilize AI. They certainly do a nice job when they're fully deployed, which they're not quite yet. As they're fully deployed, they're going to be able to either catch things in advance. I mean, we literally just talked yesterday about a load that, you know, was in the process of being diverted, and we caught it. You know, we are seeing successes in those tools playing good defense and preventing things. At the end of the day, we're going to continue to have to watch what the bad actors are doing and do everything we can to catch them really, really quickly. In terms of recourse, it depends, obviously. It depends on whether it's a BCO load or a brokered load. On the insurance side, yes, we do have, you know, insurance that plays here. It's got a, you know, a fairly healthy deductible. A lot of it's going to depend on exactly what the circumstances were, as well as what the value of that load was. Yeah, I would just add, Ravi, just because we just got past our May 1 insurance renewal, the insurers are absolutely taking it on the chin, and they're getting more creative in the policies they're willing to write, some of which you've got to sign your right over, and the insurer will fight your customer to look for ways on a legal basis to not pay the claim. Clearly, from a service perspective, we would not want to do that from a, you know, service provider perspective. Understood. Maybe a really quick follow-up here. If we dream the dream, what's the scope of upside potential in these next 90 days? If shippers decide that they want to build inventory through holiday season and through the end of the year on the next 90 days, do you think the market could get tight enough that we could maybe see some flashbacks to the pandemic and maybe some supply chain chaos and like, you know, like really high truck rates here? Yeah, good question. Obviously multifaceted. We, Landstar, generally do well in more volatile times. And obviously, if you look at our core results relative to others who have reported, I think you would reach the conclusion that we did pretty well. So I think, you know, in a volatile next 90 days, I'm also coupling that with English proficiency enforcement and things like that that might tighten up capacity. That's going to help Landstar. You know, we have business on, you know, predominantly in the spot market. When folks can't cover loads, they generally look for bigger players in the spot market, i.e., us. I look forward to that volatility. The question is whether or not there's going to be more certainty in trade policy here, and not just vis-à-vis U.S.-China, but also U.S.-Mexico-U.S.-Canada. Because as I mentioned in the prepared remarks, you're talking about, you know, 15+% of our business that right now, in some respects, people are sitting on their hands waiting to see exactly what's going to happen. I'm trying not to gauge the business on the next 90 days. I do think the strategies that we are focused on are absolutely the right ones. That universe is continuing, you know, to expand. Maybe Jim Applegate, you can talk a little bit about what's, you know, what's coming up that we covered with some of the analysts at our meeting at convention. We're going to continue to look for things that are arguably hard to do and that there are fewer competitors out there, which obviously gives us a competitive advantage if we're good at it and certainly helps us on the rate and the VC side. Yeah. Ravi, from a strategic initiative standpoint, you guys have heard a lot about Heavy Haul. You've heard a lot about CrossBorder. We put those in flight last year, and we've had great results. I mean, we've really gotten our agents engaged. We've gotten a lot more strength around those different services that we provide. As that's really kind of played itself out to Frank's point, there's a lot of other things that our agents are really well suited for in this market where we do the really hard stuff well. We pulled in Cold Chain Expedite. We pulled in Hazmat. We're executing in a very similar way. We're getting the right leaders around it. We're getting the right strategies in place to go ahead and engage the agents to recruit the capacity and sales and marketing from a direct, you know, customer approach. We're starting to really kind of get some good momentum around, from a corporate standpoint, putting our arms around our agents and directing them into the right areas where they can be successful. One of the things that didn't come out in our call today is the performance that we're starting to get around our top 100 customers. We actually grew 5% within our top 100 customers in this first quarter. I do attribute that to not only the strategic initiatives, but a lot of the other efforts that we're doing, Matt Dannegger, Matt Miller, and myself, as far as trying to get our arms around agents, pushing them to grow within their existing customer share wallet and giving them the right support that they need to go ahead and grow not only within the strategic initiatives, but as an organization. We'll continue to do that. To Frank's point, 90 days isn't going to make or break the company. I think we've got a really good long-term game plan in place to make sure that we can continue to grow in these, what we feel are real competitive advantages for our agents. As the market corrects, we'll be in really good shape. Very helpful. Thank you. Thank you. Next question will be from Bruce Chan of Stifel. Your line is now open. Hey, good morning, everybody. Sorry to ask another one here on the fraud issue. I know it's under investigation, but you've called out a $0.10 impact here, and there's an implication that, you know, it's more one-time in nature. Outside of just the magnitude of this charge and the fact that it's in forwarding, is this a separate issue because it's more preventable than the, you know, double brokering and imposter scams? Yeah, this one is extremely unique. I mean, this was a relationship which was created, you know, 10-15 years ago, which over a period of time, you know, there were some ownership changes and things like that in this satellite environment. And then, you know, there was a very unique set of circumstances. This is not your typical double brokering or anything like that. That is one of the reasons why we feel comfortable that we have got our arms all the way around it, as I mentioned, and that, you know, the charge, you know, if you took the gross and then looked at the actual and probable recoveries, that is how we get down to the net. We have got a fair amount of, I will say, security around that gross-to-net changeover. You know, is it possible that we get some additional recoveries over time? Sure. You know, we obviously are going to spend some money and invest and go after the bad guys, you know, through both civil and potentially criminal means as well. So, you know, we are, you know, we're upset about this, to be candid, both, you know, in the way that the relationship developed years ago, but also, you know, the fact that somebody arguably stole from us. So, you know, we're going to go after the bad guys. And I think it's going to, you know, it's going to make us all sit up a little straighter and look at any additional unique opportunities that, you know, that come our way in the future. We're going to look really, really hard at. Okay. That's good to hear and really helpful. And then just, you know, quick follow-up here. I know you gave some color on the near-term trends with Mexico CrossBorder. Maybe any commentary there on, you know, what you're hearing from shippers in terms of, you know, the long-term outlook there and, you know, whether or not you're considering additional investments, you know, on an M&A standpoint or maybe on an organic basis? Yeah. So good set of questions. Again, we do believe that this is the right long-term play. You know, M&A is probably not the first thought that comes to my mind when I think about the U.S.-Mexico cross-border business. We've got some great agents who do a fabulous job for us in shepherding freight northbound, southbound. We are looking at whether or not we are penetrated enough in other gateways. We feel like Laredo is a wonderful footprint for us. You know, do we need, whether it's, you know, joint venture, lease, owned? Do we need other facilities along that border as you think further west? It obviously picks up, you know, different lanes. It picks up different commodities, things like that. We are looking at whether or not we should be more penetrated in some of those other locations. I'll let Jim Applegate touch on some of that. Yeah. From a Mexico market standpoint, I mean, obviously the tariffs, I think, have kind of put a cloud over some of these longer-term investment decisions. I think there needs to be a little bit more clarity before you start hearing about any, you know, kind of wholesale decisions to deploy capital. I think from a long-term perspective, you know, Mexico is going to come out of here, I think, as a good winner. I think, you know, you're hearing that from shippers. You're hearing that from other people within the industry that are trying to position themselves, you know, over the next, you know, three, five, ten years. You know, if you see what's happening with these tariffs and trying to kind of push more manufacturing back here to North America, I think Mexico does still come out a clear winner. You know, we're doing everything we can to make sure that we're in the right position to capitalize on that. Okay. Great. Thank you. Thank you. Our last question would be from Bascome Majors of Susquehanna. Sir, your line is now open. Thanks for taking my question. Yeah. Jim, you walked us through some of your cost items or directional thoughts into the second quarter. Can we zoom out a little bit on that discussion? You know, where is your accrual for incentive comp and stock comp for the year relative to where you thought it would be when you started the year? And ultimately, if we get the recovery year we're all hoping for into 2026, you know, how much of that needs to come back to get you back to a normal level? Thank you. Hey, Bascome. Great to hear from you. On our year-end 2024 earnings conference call, I gave a $21 million normalized figure between incentive comp and stock compensation. We're currently accruing to about $12 million this year, Bascomb. It's about $4 million from the cash plan and about $8 million from the stock plan. If we went back to normal in 2026, would that be reflective of where you started 2025, or would there be something different that we need to consider there? There'd be a little bit of impact on, you know, merit wages. But I would tell you, Bascomb, it's probably a $9 million, let's say $12 million is base case for 2025. I would tell you hypothetical for 2026 would be that $9 million headwind or $21 million on a full year. Thank you so much. Take care. Thank you. At this time, I show no further questions. I would like to turn the call back over to you, sir, for closing remarks. Thank you all. In closing, while the freight environment remains challenging, we do see some positives in the near term. We were encouraged by first-quarter truck volume performance. And with a choppy industrial economic backdrop, we were pleased with the 6% year-over-year revenue increase in our heavy haul service offering. I was also pleased to see the impact of some cost performance on items within our control. For example, the first quarter was positively impacted by increased gains on sales of used trailing equipment, decreased depreciation on IT software projects, a decreased provision for contractor bad debt, and decreased expenses on the company's trailing equipment fleet. Regardless of the economic environment, the resiliency of the Landstar variable cost business model continues to generate significant free cash flow. Landstar has always been a cyclical growth company, and we are well positioned to navigate the coming months as we continue to look forward to higher highs when the freight market turns our way. Thank you for joining us this morning. We look forward to speaking with you again on our 2025 second quarter earnings conference call in late July. Thank you. Thank you for joining the conference call today. Have a good morning. Please disconnect your lines at this time.