Good morning and welcome to the Old Dominion Freight Line third quarter 2025 earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's remarks, there will be an opportunity to ask questions. If you have a question, you may press star then one on your touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I'd now like to turn the conference over to Jack Atkins. Please go ahead. Thank you, Jason, and good morning, everyone. Welcome to the third quarter 2025 conference call for Old Dominion Freight Line. Today's call is being recorded and will be available for replay beginning today through November 5th, 2025, by dialing 1-877-344-7529, access code 1478106. The replay of the webcast may also be accessed for 30 days at the company's website. This conference call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements, among others, regarding Old Dominion's expected financial and operating performance. For this purpose, any statements made during this call that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words believes, anticipates, plans, expects, and similar expressions are intended to identify forward-looking statements. You are hereby cautioned that these statements may be affected by the important factors, among others, set forth in Old Dominion's filings with the Securities and Exchange Commission and in this morning's news release, and consequently, actual operations and results may differ materially from the results discussed in the forward-looking statements. The company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events, or otherwise. As a final note before you begin, we welcome your questions today, but ask in fairness to all that you limit yourself to just one question at a time before returning to the queue. At this time, for opening remarks, I'd like to turn the call over to Marty Freeman, our President and Chief Executive Officer. Marty, please go ahead, sir. Good morning and welcome to our third quarter conference call. With me on the call today is Adam Satterfield, our CFO, and after some brief remarks, we will be glad to take your questions. Old Dominion 's third quarter financial results reflect continued softness in the domestic economy. Our revenue declined 4.3% compared to the third quarter of 2024, due primarily to a 9% decrease in our LTL tons per day, which was partially offset by ongoing improvement in our yields. We continued to operate efficiently during the quarter and were able to manage our direct variable cost as a result. The deleveraging effect from the decrease in revenue, however, drove an increase in our overhead expenses that resulted in the increase in our operating ratio to 74.3%. As we navigate through what continues to be a challenging micro environment, we remain focused on what we can control. I'm proud of how our team continues to execute the core elements of our long-term strategic plan as we work to ensure that Old Dominion is the best positioned carrier in our industry to respond to an inflection in the operating environment when it does materialize. As we have said many times before, our long-term strategic plan includes an ongoing focus on delivering superior service at a fair price. The other key elements of our strategy include investing in new service centers, equipment, technologies, and most importantly, our people. Our past financial results have proved that investing in ourselves through the economic cycle can pay dividends over the long term. An example of how this is happening is we've been able to control our direct variable cost this year despite the lack of network density associated with the decrease in our volumes. In fact, our direct variable costs are relatively consistent as a percent of revenue to when we produced company record operating results back in 2022. While there are many factors influencing these costs, we have implemented new workforce planning and dockyard management tools, as well as P&D and line haul route optimization software, which have helped drive improvements in our productivity, even as we have faced headwinds from lower density. Importantly, we have done this while maintaining the highest standard of service for our customers, and I'm pleased to report that we once again provided our customers with 99% on-time service and a cargo claims ratio of 0.1% during the third quarter. That said, we also know that providing our customers with superior service is more than simply picking up and delivering the freight on time and without damages. Mastio & Company measured 28 different service and value-related attributes during its annual survey of shipper and logistic professionals. We were honored earlier this month to be named the number one national LTL provider for the 16th consecutive year. In addition, Old Dominion maintained a sizable advantage against our competition, and we finished first in 23 of the 28 categories evaluated by Mastio. I would like to congratulate the OD family of employees on this accomplishment. Every member of the OD family is incredibly proud of this recognition, and we also remain highly motivated to continue providing our customers with best-in-class service every single day. We know that consistency of our service creates value for our customers. It also differentiates us from the competition. Our customers know that they can count on us to help keep promises through the ups and downs of the economic cycle, which means they can keep their commitments to their own customers. Importantly, our consistent service also supports our disciplined approach to yield management. Over the years, we have built a unique culture centered on core elements of our strategic plan, the cornerstone of which is providing our customers superior service at a fair price. This has created an unmatched value proposition for our customers and allowed us to win more market share over the past decade than any other LTL carrier. We will continue to focus on delivering best-in-class service to our customers while also operating efficiently and maintaining our disciplined approach to managing our yields. As a result, we are confident in the ability to win profitable market share and increase shareholder value over the long term. Again, thank you for joining us this morning, and now Adam will discuss our third quarter in greater detail. Thank you, Marty, and good morning. Old Dominion's revenue totaled $1.41 billion for the third quarter of 2025, which was a 4.3% decrease from the prior year. Our revenue results reflect a 9.0% decrease in LTL tons per day that was partially offset by a 4.7% increase in LTL revenue per hundredweight. On a sequential basis, our revenue per day for the third quarter decreased 0.1% when compared to the second quarter of 2025, with LTL tons per day decreasing 2.9% and LTL shipments per day decreasing 1.6%. For comparison, the 10-year average sequential change for these metrics includes an increase of 2.9% in revenue per day, an increase of 0.5% in LTL tons per day, and an increase of 1.9% in LTL shipments per day. The monthly sequential changes in LTL tons per day during the third quarter were as follows: July decreased 1.9% as compared to June, August decreased 1.8% as compared to July, and September increased 1.3% as compared to August. The 10-year average change for these respective months is a decrease of 2.9% in July, an increase of 0.4% in August, and an increase of 3.3% in September. For October, our current month-to-date revenue per day is down approximately 6.5%- 7% when compared to October of 2024, with a decrease of 11.6% in our LTL tons per day. As usual, we will provide actual revenue-related details for October in our third quarter Form 10-Q. Our operating ratio increased 160 basis points to 74.3% for the third quarter of 2025, as the decrease in revenue had a deleveraging effect on many of our operating expenses. Our overhead costs, which are primarily fixed in nature, increased 160 basis points as a percent of revenue due to this effect and the ongoing execution of our capital expenditure plan. These factors contributed to the 70 basis point increase in our depreciation cost as a percent of revenue. Miscellaneous expenses as a percent of revenue also increased 40 basis points due primarily to changes in gains and losses on the disposal of property and equipment between the periods compared. While our remaining overhead cost increased as a percent of revenue, these expenses in aggregate were lower than the third quarter of 2024, as we continued to exercise excellent control over our discretionary spending. Our direct costs as a percent of revenue were flat compared to the third quarter of 2024 due to the improvement in yields and continued focus on operating efficiencies. We were pleased that our team was able to effectively match our variable cost with current revenue trends during the quarter. I also believe that we will be able to improve these direct costs even further when we return to a growth environment and benefit from the improvement in network density. Old Dominion's cash flow from operations totaled $437.5 million for the third quarter and $1.1 billion for the first nine months of 2025, respectively, while capital expenditures were $94 million and $369.3 million for those same periods. We utilized $180.8 million and $605.4 million of cash for our share repurchase program during the third quarter and first nine months of 2025, respectively, while our cash dividends totaled $58.7 million and $177.2 million for those same periods. Our effective tax rate for the third quarter of 2025 was 24.8% as compared to 23.4% in the third quarter of 2024. We currently expect our effective tax rate to be 24.8% for the fourth quarter of 2025. This concludes our prepared remarks this morning. Operator we'll be happy to open the floor for questions at this time. Thank you. We'll now begin the question and answer session. To ask a question, you may press star then one on your touch-tone phone. If you're using a speaker phone, please pick up your handset before pressing the keys. In the interest of time, please limit yourself to one question. To withdraw your question, please press star then two. At this time, we'll pause momentarily to assemble our roster. The first question comes from Chris Wetherbee from Wells Fargo. Please go ahead. Hey, thanks. Good morning, guys. Maybe, Adam, we could start on sort of the October environment. You mentioned tonnage down. I think 11.6% is what you said. Kind of curious what you're seeing from a demand perspective. Obviously, it seems like there's some softness in the first part of October. I think you typically give us some help in terms of both top line as well as operating ratio for the forward quarter. Any kind of comments you have, just given the context of what we're seeing so far in October around the fourth quarter, would be very helpful. Maybe I'll just start with that because, you know, obviously, the operating ratio is going to be impacted by what's going on with revenue. The average change in our operating ratio from the third to the fourth quarter is a sequential increase of 200 to 250 basis points. As a reminder, that excludes any change in the insurance and claims line item. As you know, that gets impacted by the annual actuarial study that we conduct in the fourth quarter of each year. Basically, the current trend with revenue, we're starting out, our tonnage is underperforming seasonality a little bit. It looks like with our revenue per day performance, we're really just, I'd say it's a similar, if we continue to trend at this down 6.5%- 7%, that's similar underperformance or would be for the full quarter as what we've seen in the first three quarters of the year. If we continue with that same revenue per day being down 6.5%- 7% for the full quarter, I'd say that we'd probably expect a sequential increase of about 300 basis points. I would say that we probably ought to put a range on that given the revenue uncertainty and probably go an increase of 250 to 350 basis points. I think if we see some revenue recovery, that could help us get to the low end of the range, which would be, you know, right there, 250 bps right at the top end of normal, if you will. I think just given the continued uncertainty on revenue, if things were to get any worse, which we're not seeing at this point, that would give a little flexibility on the top side. Fortunately, after the performance that we just had in the third quarter, we're at a great starting point as we start off with the fourth quarter performance. Our next question comes from Jonathan Chappell from Evercore ISI. Please go ahead. Thank you. Good morning, everyone. Adam, as it relates to salaries, wages, and benefits, down sequentially as a percentage of revenue, I'm pretty sure you still put in your annual wage increase on September 1st. Was this a function of headcount numbers coming down in any type of material manner? Also, as we think about the 3Q to the 4Q transition there, if the wage increase did go into effect on September 1st, would we expect the usual kind of uplift on that line item as it relates to the OR? Yeah, we definitely put a wage increase in effect at the beginning of September, as we always do. As we continue to perform in or operate in the mid-70s, we think that's very appropriate to continue to reward our employees for the outstanding performance. Not just from an operating ratio standpoint, but as Marty mentioned, we continue to be extremely proud of the service metrics that we're offering to our customers, the value, and that came through in the 16th straight win of Mastio. That definitely was in there. We did continue to see our headcount drift down a little bit through the third quarter. As you know, the decrease overall from a total number of full-time employees is down about 6% compared to the third quarter of last year, with shipments being down almost 8%. We expect that we'll continue to see normal attrition as we go through the fourth quarter and probably that headcount will continue to drift down a little bit. That always is something that's a big driver of that change when I look at the average increase in the operating ratio from the third to the fourth quarter. If you really combine, I like to combine the salaries, wages, and benefits and our total operating supplies and expenses, on average, those two main components generally increase about 170 basis points. We continue to have that pressure there. With revenue pressure especially, it continues to get harder and harder if you want to give service at the levels that we do to manage those costs. That's one reason why we think that the operating ratio will be a little bit higher than our normal sequential change. The other thing is, just looking at our overhead costs, we've been averaging somewhere around $310 million of overhead a quarter. I think it may be a little bit lower than that, probably in the $305 million- $310 million range in 4Q. That creates 150, 170 or so basis points of pressure as well. Really, I think that $300 million, just to be clear, that's when we gave a range of $250 million-$ 350 million for the operating ratio. It's probably $300 million-$ 350 million, but I think we can continue to perform. If we get any type of acceleration on the revenue side, obviously, we just outperformed the normal sequential change from 2Q to 3Q, even with revenue pressure. Obviously, we're going to continue to manage costs as tightly as we can in this lower revenue environment, as long as it doesn't jeopardize our ability to be able to respond to a growth environment when that does materialize. Our next question comes from Tom Wadewitz from UBS. Please go ahead. Yeah, good morning. I wanted to ask you a bit about, I guess, capacity positions. If you could just let us kind of tell us where you think you're at on terminal capacity. I think you're kind of normal as you like to have 20%- 25%. I don't know if your last comments maybe are more 25%- 30% or even beyond that. If you think about how much excess, it seems to me like with some projects, you kind of hold them off. I don't know if you count those in a capacity number where you've kind of, you know, made the investment, but you haven't kind of brought up the terminal because you really don't need it. I guess a kind of broader question is really like, where do you stand? Do you go for a period where you maybe spend less CapEx and do less on terminals because even though you're long-term focused, you're just, you know, kind of so far beyond what would be normal for you in the terminal position for excess capacity? Yeah, we're definitely north of our target. It is generally to have 20%- 25% excess capacity. I'd say we're well north of the 30% at this point and probably even above a 35% type of range. I think it is fair to assume that we'll have lower CapEx for our real estate next year. We haven't fleshed all of that out completely at this point. Some of the capital expenditures that we have, in some cases, are repair projects. We've got some projects that are already in the works right now that'll continue into next year. That's some spend that will always kind of be out there. I think we're in really good shape with the network where it is. We haven't opened any service centers this year. If you go back over the past couple of years of this freight recession that we've been in, I think we've opened six service centers going back to the end of 2022. We definitely have built up some capacity. We do have several service centers that we've completed construction on, to your point. When we do that, they're ready to be turned into the operation. For that reason, we do start depreciating those facilities. The incremental depreciation expense is already in our numbers, and it's part of the carrying cost of having that capacity availability for our customers. That's a key part of the value proposition, to always be able to say yes to a customer. While capacity isn't maybe on everybody's mind right now, it hasn't been that long ago when we've seen periods where the environment does turn. It generally turns very quickly in our industry. I think we'll see customers' focus go right back to who has the capacity, not just on the service center side, but with labor and with equipment and who can really respond to those growth needs. I think that is a big part of our value proposition and why we feel like we're better positioned than anyone to respond when the market does eventually flood back to the positive. We have already several service centers in ready reserve, so to speak. We just think it's more appropriate to hold them out versus increasing the number of service centers in operation, which increases line haul expense, weakens your density even further, and puts more pressure on cost. It's similar to what we've done in prior cycles before. I think we'll see those turn on whenever we see the growth come back. The next question comes from Jordan Alliger from Goldman Sachs. Please go ahead. Yeah, hi, good morning. I wanted to come back to demand a little bit. Obviously, things continue to be fairly weak, but can you maybe give your perspective, you know, thinking ahead over the next year or so on inflection timing, what could drive it? Are we getting closer? You know, what's it going to take to get back to tonnage seasonality on track? Thanks. Yeah, that's a hard one to answer, obviously. We've been ready and waiting for it to turn over the last couple of years, this freight recession. If you look at ISM being below 50 for 32 of the last 35 months, I believe, that's obviously put pressure on everyone. We haven't been immune to the macroeconomic environment. I'm really pleased with how we've been able to deal with this decrease in network density in terms of controlling what we can control. That's the message that we give to the team: control those items, those expenses, control our service first and foremost. We've obviously been able to do that and be able to keep our variable cost as a percent of revenue, the direct variable cost, that is, consistent with where we were back in 2022 when we were benefiting significantly from the improvement in network density. I think that whenever that inflection happens, and we're confident that it will, we stand ready to be able to put on strong profitable growth. I think that's when our model shines the brightest. When you look back at an environment like a 2018 or 2021, when that market turns, I feel confident that we're better positioned than anyone else. Going back to the last question about capacity, and again, that's on the service center side, I think there's a misconception in the market just looking at how the allocation of Yellow's service centers have gone since they filed bankruptcy. We just don't see that there's been a material change in many of the public carriers' total number of service centers when we look at the change from 2022 to the change in where they finished in 2024. I think there's less capacity out there. Obviously, all of Yellow's service centers didn't get sold to market, and many were sold outside of the market or remain unsold. I think what we know was a capacity-constrained environment in 2022 will be even more capacity-constrained when we do eventually get into the up cycle. I think those are the reasons why we feel like we're better positioned than ever to be able to start showing strong profitable growth. The next question comes from Eric Morgan from Barclays. Please go ahead. Hey, good morning. Thanks for taking my question. I wanted to follow up on the last one on volumes. Obviously, you know, you haven't gotten any help from the macro, and I appreciate all the comments on how you've responded and our position. Can you just speak to the market share dynamics here? Just because, you know, it does feel like the industry is probably not down quite as much, at least from what we can tell. I don't know, is this something that can stabilize into next year, or are we just kind of run rating into another year of down volumes? Yeah, Eric, I think that the challenge that we see is that our numbers are just compared to the remaining public carriers. Many of the comparisons leave out the fact that the third largest carrier went bankrupt, and there was a reallocation of that volume. If you include that carrier in the mix going back to the end of 2022, then the industry numbers look a little bit different in our relative comparison to them as well. I think we talked about this in the last quarter. The best way that I feel like looking at market share is I look each year when all the carriers' revenues are published in Transport Topics, and that would include the private carriers as well. We've been right at 11.8% revenue market share for each of the last three years. That's our strategy. Generally, in a weak macro environment, we continue to try to maintain market share, maintain our discipline over yields, and discipline over our cost. Usually, we come out much stronger on the other side. I feel confident about that. When will the market change? I mean, that's obviously the big question. I've asked ChatGPT that, and it suggests next year. Who knows? We'll see if AI is right or looking at other economic forecasts will prove to be right. I think that it seems like as we've gone through every quarter this year, the next quarter has been pushed out to show that we would have a full return to normal seasonality. Obviously, we've underperformed seasonality throughout each quarter. Based on the starting point with October, I think we'll have a similar underperformance from a revenue per day standpoint, at least sequentially. Typically, the way this would work out was you start seeing a little increase in demand, you start closing that gap to seasonality, you get back there for a couple of quarters, and then we have significant outperformance. I'd like to think that when we get into the spring season next year, by then, I think this week we probably are going to have a good indication of where the macro might go. We get a lot of feedback from customers that continue to have concerns over trade and the impact of the tariff environment. If some deal is formed, if you can close that uncertainty loop that many of our customers continue to struggle with, perhaps that's when we'll finally start seeing a little bit of recovery. It was obviously there in the first quarter of this year, there was optimism, and those were the couple of months that ISM did go back above 50. I think that there's that pent-up sort of demand that's hanging out there, but I think we got to close that trade loop question before we see our customers really get excited about trying to grow their businesses again. There's puts and takes on all sides with it. I think the tax bill was important, the accelerated depreciation component of that. Hopefully, we'll start seeing some drive to demand. It seems like there's been a few things recently helping on the supply side within the truckload industry. All of those things should help to bring the supply and demand equation back into balance and support our ability to start growing again. If you just roll normal seasonality out from kind of the current trend where we are, it certainly would lend itself that if we don't have a major inflection, we could be looking at continued declines on a year-over-year basis, at least for the first quarter. Hopefully, we'll start seeing some compression for there and a true spring recovery, which is what we normally see in our business. The next question comes from Ravi Shanker from Morgan Stanley. Please go ahead. Great, thanks. Adam, maybe a couple of follow-ups to what you just said. A, just on October itself, obviously a lot of questions there, but do you have a sense that the kind of big step down from September to October is something transitory, maybe related to the government shutdown? From what you see right now, do you think that this continues for the entirety of the fourth quarter? Also, you had mentioned the things happening in the TL market. Obviously, we did see a bunch of volume move out of the LTL market at TL. You guys have always been optimistic that it'll come back to LTL. Are you starting to see any of that happen at this point, the TL market tightening up a little bit? Thank you. Let me see if I can unpack all that and remember every point. The October, just to focus on tonnage, right now where the trend would be, that would have us sequentially down 5% versus September. The 10-year average is a 3% decrease. Again, it's consistent. The September performance, which to point out was an increase, which was nice to see after several months of sequential declines, but that was up 1.3%. Two points, if you will, 200 basis points below the 3.3% average increase. It's, I think, a similar underperformance relative to seasonality at the start. Like I mentioned before, if we continue at this same kind of pace of being down, if you carry the 6.5%- 7% decrease throughout the period, that'd really be a similar underperformance, if you will, for the fourth quarter from a revenue perspective as what we've been seeing through the year. I don't think anything has gotten worse per se. It just sort of seems like things have continued on. Frankly, that's what we were expecting with our third quarter revenue. We weren't anticipating an increase. Normally, see an increase there. We thought we would see revenue at $22 million per day. That continued through the full quarter. I think the demand is, it feels consistent to me. Obviously, we haven't seen the inflection that we've all been sort of waiting for. You don't typically see that in the fourth quarter. Obviously, at this point, October is 23 workdays out of a 62 workday quarter. A lot of the trend that we have in October will carry the quarter. December is always a weak month. I think a lot of it will be, can we kind of hold pace to a degree with seasonality from a tonnage standpoint to sort of keep that current trend consistent through the quarter? Then be in a position to hopefully start seeing some type of movement upwards when we get into the first quarter of 2026, which is when you would, for the full quarter, our revenue historically is down another 2% in the first quarter. By the end of that quarter, that's what will be important. Do we start seeing some improvement there in demand where you see that spring build starting? That's just something that unfortunately we continue to kind of wait on. The next question comes from Scott Group from Wolfe Research. Please go ahead. Hey, thanks. Good morning. Just to follow up, you're not seeing with October a big drop-off in government-related activity? That was just a quick follow-up. Just bigger picture, how are you balancing long-term pricing discipline versus what's going on with network density? Are you seeing any change in the competitive dynamic, the pricing environment? Just big picture, love to get your thoughts on that. Thank you. Yeah, that was one of the pieces of Ravi's questions that I kind of missed. We don't have any direct government business. I think that, again, it seems like demand is consistent, but it's obviously October was a little weaker, especially at the start of the month. The past week has been good. I think there's probably an indirect effect on the overall economy that could be pressuring things there as well. From a pricing standpoint, continue to see general discipline out there. Obviously, we continue to move forward with our increases. We're seeing an increase in yield of about 5% in October, and that's ex-fuel. That's what the change would be if you kind of think about the full quarter. If we hit normal seasonality, it would be an increase of right at 5%. That's kind of our baseline thinking as we go through the period. I think that having those conversations, obviously, we're in a very competitive environment right now with demand being weak overall for the industry. We've got, I think, the best sales team in the industry that's out there that's having conversations every day with our customers about the value that we provide. We have a lot of conversations about service failures that customers may be dealing with that are using other carriers. It's up to us and to our sales team to make sure that we can demonstrate value. I think we've proven that time and time again. To give the service that we do, our costs are going up every day. We're having more cost inflation this year than what we were originally anticipating. We've been consistent with the increases that we've asked for across the board. I think we've been successful there without seeing any major customer loss or anything like that. I think when you look at actual performance, our operating ratio, our earnings per share, and the relative change, a lot gets missed when you see, at least for the public carriers, just a comparison to consensus and things of that nature. While we don't like seeing our earnings per share being negative like they've been, when I look back at the second quarter and the relative comparison, at least for the, I'd say, three public carriers that are standalone entities, their earnings per share was down at least double what ours was. I think that kind of proves a couple of things: the importance of being disciplined with yields, but also the cost control that we've been able to display throughout the business and really through the past couple of years that protected our operating ratio, protected our earnings, and put us in a great spot to be able to grow when the environment is more conducive to growing. The next question comes from Bascome Majors from Susquehanna. Please go ahead. Thanks for taking my questions. Really, to follow up on that theme, Adam, if we kind of run seasonality through, it looks like next year could be potentially the fourth consecutive year of tonnage decline. Certainly, you've gotten no help from the market, but that's abnormal in the history of the company. As you take a step back, I don't know if you have a direct answer to this, but what is the point in this sort of new, weaker, more competitive paradigm where you really think about the balance of service, price, and volume growth, and if you need to twist some of those knobs to really drive the long-term outcome that benefits your shareholders? Thank you. Yeah, I think that, you know, obviously, we've had, I mean, it's been a very disruptive and challenging period over the last three years. We've heavily invested for future growth opportunities, and we still feel very confident in what our long-term market share opportunities are and believe we've got a long runway for growth. We wish that the market would have already turned, but we'll have spent $2 billion cumulatively over the last three years with volumes being down to expand our network, to continue to keep a fleet replacement cycle, and be prepared for future opportunities. That comes at a cost as well. We had a lower CapEx spend this year, and very likely that it'll be lower overall next year as well. I think that will continue to pair the capital expenditure plan back to grow into what we have. We'll take some of the pressure off the overhead cost, and we can continue to manage our variable costs. As much of a fixed cost business that we run, with a network of 261 service centers, probably two-thirds or more of our costs are variable in nature. I think we've shown good control there. This down cycle has obviously lasted a lot longer than I think anyone would have expected. When we go through down cycles, we've been through this multiple times before. I think a lot of people are ready to write us off, and several analysts have through this cycle as well. I think the growth story is over, but we keep a lot of those old headlines around for bulletin board material, if you will, and look forward to when the market does eventually inflect back to the positive. I think the key thing is, like I mentioned earlier, the value you offer to your customers. We are a little bit of a price premium, but with the control that we have over cost, our go-to-market price is not much higher than our competitors. I would say typically when we get in an up cycle as well, the competitors that don't have as much capacity, that's when you see their prices go higher than ours, and that price gap will continue to close, especially for those carriers that, frankly, from a GAAP operating standpoint, there's six other publicly traded LTLs. Four of those from a GAAP operating ratio have been operating in the 90s. I think that, you know, to deliver value to their shareholders, they're going to have to increase prices would be my guess. When that happens, that price gap closes, that too gives us additional volume opportunities. I think we'll benefit from the improvement in demand, the improvement or, you know, volume opportunities coming from that churn at competitors. That's historically what we've done. That's fully what we're expecting at this point as well, once we can get back into a demand environment that's more conducive to growth and not trying to go out. We want to win market share. We don't want to go out and try to take it, right? The next question comes from Brian Ossenbeck from JP Morgan. Please go ahead. Hey, good morning. Thanks for taking the question. Maybe two quick follow-ups for you, Adam. Just the length of haul was coming down a good amount here. I don't know if you can put some context around that. Is that a sign of just the demand environment that you're in? Is there some sort of shifting mix in there? Does it have any sort of implications for how you operate the network or how the industry responds? Just on the pricing side, I want to get your quick thoughts on dynamic pricing. We've heard a little bit more about it. I don't know if it's really widespread in use, but I just wanted to get your perspective on how you utilize that, if at all, e xcuse me, and what the rest of the industry is doing as well? Thanks. Yeah, on the dynamic pricing side, we hear some commentary of that. I think that's something that's probably used in a small way by some carriers. I don't think that we've ever seen a whole lot of positive impact from that. That's not really something that we subscribe to. For us, I just feel like it's more important to be consistent. Customers know what to expect from us. We look at how our costs are changing each year, and that drives what we try to ask for from a cost-plus standpoint to continue to support investments that we make, be it in service centers and equipment, investments in technologies. Those investments in technologies, we've shown that they help us continue to improve our costs. In some cases, you invest to drive an improvement in your service product and customer engagement and customer stickiness. We also have plenty of investments that allow us to operate much more efficiently. We've kind of proven that by our ability to be able to manage our variable costs. I don't think that when you look at some of the carriers historically that have done some of these things, I can think back to the first half of 2023. I don't think that it's proven it's weighed out in terms of when you look at earnings per share performance. It just seems like it never really pays to try to be willing to take less of a rate when costs are going up. I think the earnings per share trends for us and other carriers kind of prove that out. I forget, what was the first part of your question again? Oh, just the implications of shifting length of haul. It seems like it's been coming down for a while on the market or mix thing, and how it impacts the business. Yeah, I think that's something that has been developing over time. We expect that it will likely continue to decrease. I think that shows kind of the regionalism as we continue to expect that we'll see growth, especially e-commerce trends that will probably move more and more freight into kind of next day, second day lanes. That's about 70% of our revenue today. In the most recent quarter, we actually, our retail business outperformed industrial again. That's something that's probably contributing. I think the other thing is when there's time in supply chain, and obviously there is right now, there are other forms of transportation that can be used for some of the longer lengths of haul at a cheaper price point. Those are some of the things that, if you go back to 2021, for example, if freight was hitting the shore, we were picking it up. It was converted to truck as soon as possible in the supply chain. We were probably getting some longer lengths of haul at that point. I think shippers are able to take advantage of time in the supply chain right now and getting it to us later in the process, if you will. That's partly some of that change that we're seeing. The next question comes from Jason Seidl from TD Cowen. Please go ahead. Thanks, operator and Marty, Adam, Jack. Good morning, guys. I wanted to stick on pricing a little bit. You guys obviously announced a GRI recently. It was 4.9%, I believe, equal to the prior year. The market feels like it's weaker this time around. How are you guys gauging sort of compliance to the GRI as we move through the fourth quarter right now? Would you think it might be a little bit weaker than last year? You mean the increase or the request from the customers about the increase? The increase that you announced, I think yours takes place in November, early November, I believe? Yeah, we were 11 months this year. We've done that in the past. Some years, it's 12 months. You know, we base our general rate increase off of our cost each year. We're not getting any kickback, so to speak. We explained to our customers what our costs are for equipment, real estate, you know, just to generally operate our business. Keep in mind, too, this only affects 25% of our customer base. This is a general tariff for a non-contract. Our contracts are about 75% of our business, and those increases are based on, you know, months of the year when they expire. This only affects 25% of our business. The next question comes from Reed Seay from Stephens. Please go ahead. Hey guys, thanks for taking my question. You've had a lot of competitors invest in service and in their network, and you have a peer about to spin off from their parent, maybe getting a little more financial attention. Are you seeing any changes in the market from these investments from either your public or private peers, or any impacts from your peers as they prepare to spin from the parent company? Yeah, the best information that we can use to compare us versus the others from a service standpoint is all the detailed information that we get from the Mastio study. We really didn't see a whole lot of movement, if you will, when you look at us or any of the other carriers. The gap between us and the competition stayed as wide as it's ever been. As Marty mentioned, there's 28 different attributes related to service and value, and we were number one in 23 of those attributes. When I look at the other logos, there really hadn't been a lot of change in the past, or at least on the value map in the past two to three years, despite we hear more about the service improvements from investors than I think we see it in Mastio or hear from customers. We continue to focus very intently, though, on that data. Service is more than just being able to pick up and deliver freight on time and without damage. Those are the things that we work very closely. We talk about these attributes and how we're performing with every employee throughout the company. Every person lends a hand to giving service, whether it's an external customer or an internal customer. That's what we focus and what we spend a lot of time and money with training our employee base to make sure that every experience with Old Dominion is a positive one. We stay best in the game every day. It's not just best in the game on Saturdays for ESPN game day. We want to be the best in the game every day. The next question comes from Ken Hoexter from Bank of America. Please go ahead. Hey, great. Good morning. Adam and Marty, maybe I'm still a bit confused by the comments of demand is consistent and similar underperformance, you know, as you've seen recently. That commentary, Knight, who reported already, said things got worse in the LTL world rapidly to start the quarter. Volumes down 11.5% against last October's down 9% comp, which was, I think, the easiest comp you had as the worst month of the year. I just want to understand, is it consistent? Did something fall off rapidly? I guess the weight per shipment, I don't know if you want to throw some thoughts there, is that decrease, is that in line with normal shifts or is the economy making that a little bit lighter? The flow there of the volumes, I guess there's some shipper commentary that you're being more aggressive on pricing. I would presume your answer is going to be, you know us, we never change that. I'd just like to hear that from you directly. Is there any change on your pricing moves in the market? Thanks. Yeah, there's no change there. You can see our numbers and we continue to be consistent with our approach. I think our year-over-year change and our yield trends kind of bear that out. No change there. I would just say with respect to the volumes, obviously, they're down. With volumes being down double digits, at least at the start with October, that's tough. That's coming on the heels of being down the last couple of years. It's something we continue to manage through. I think that my commentary about similar underperformance was, again, just looking at the sequential change in our tonnage relative to what the 10-year average is. Last year, the sequential change in October versus September was down 3%. Right now we're trending down 5%. That's making that year-over-year change look a little bit worse. We'll see as things progress through the quarter whether that changes or not. Just looking at the overall revenue per day and looking at how we've, whether it's revenue per day or tonnage, if you have a similar underperformance relative to our 10-year average sequential change, that's kind of how I come up with the numbers that we have, be it the tonnage would be down, I don't know, about 11.5%. It could be a little bit better. The revenue sort of being in that same type of, basically, it'd be around $1.29 billion if we continue on with this down 6.5%- 7% or if we underperform at a similar rate to what the underperformance has been this year, sequentially, that is. No major, for us, it just feels about like the same from a macro standpoint and from a customer demand standpoint, the conversations that we continue to have. Like I said earlier, I think that we kind of came into this year, or at least I'd say in the second quarter, thinking that we needed clarity from a tax bill, clarity from an interest rate environment. Once everything got stirred up with the tariff conversation, we felt like, okay, we got to get this settled. Really, it's settled for our customer's sake. We've got a couple of those components checked off the list, if you will. At least the interest rate cut cycle has begun. We will continue to watch and see if we get further cuts there that should help customers. Like I mentioned earlier, I think the biggest thing is just the overall uncertainty in the environment with respect to, you know, if you're trying to make a business decision not knowing what all the cost inputs might be, it's hard to make that decision. I think that's just got some business owners and managers just kind of paralyzed at this point. If we can start getting some clarity there, then I think we can start seeing some change in activity. The next question comes from Jeff Kauffman from Vertical Research Partners. Please go ahead. Thank you very much. Hey Marty, hey Adam, and congratulations on another terrific Mastio finish. I wanted to see if I could unpack a little bit more visibility into, you know, what your different customer buckets are doing. Because when I think about it, industrial production hasn't really gotten incrementally worse in the last couple of months. The ISM hasn't gotten incrementally worse in the last couple of months. You gave us a little insight that your retail business customers were outperforming your industrial customers. I was wondering if however you think of bucketing it, you know, whether it's an industry or kind of a customer group, I don't think e-commerce is down that much. Kind of where is it a little weaker to drive the tonnage down the way it is and kind of which buckets are performing a little bit better or a little bit stronger in this environment? Just help us give us a little context. Yeah, we generally put the group or SIC codes into a couple of major buckets. Our industrial revenue is 55%- 60% of revenue, and the retail is about 25%- 30%. In the most recent quarter, the revenue per day, we were down 4.3% overall for the quarter. The retail, it wasn't wildly different, but was down about 4% compared to the third quarter last year. The industrial was obviously a little worse, but not a major difference. Part of that goes back to the consistency that we've had in our customer base. We've talked a lot over the fact that we haven't lost any major customer accounts. We haven't really lost major lanes or whatnot and awards from existing customers. We've had a lot of continuity there. Obviously, demand for our customers' product has been weaker. Orders have been weaker. I think that's coming through with our wait for shipment trends. That's something that generally is indicative of the macroeconomic environment. We're seeing wait for shipment that's down in October right now about 2.3%. That's continued to go lower and is driving that overall change in our tonnage. Obviously, with business levels being down like they are, you have to say, what gives if you think you're maintaining market share and not losing customers? It is those weaker orders. I think we continue to hear some customers tell us that they're consolidating shipments within the truckload industry. With that oversupply that has been there, I think that you've had capacity that's been readily available and that opportunity has existed. We've had some pressure in our 3PL business. That's about a third of our overall revenue. Some of that could be the dynamic pricing that carriers are out there using that to a small degree and some variability. That could be causing some incremental pressure there within the 3PL world. Not seeing it in a major way. It's just some 3PLs are down a little bit more. I think historically what we've noticed is 3PL managed business, they're able to leverage their technologies, the carrier connections that they have, and help customers consolidate loads into truckloads. I feel like more of the pressure is kind of that truckload consolidation on the 3PL world. It just seems like it's coming in from multiple areas, if you will, what's causing the overall weakness in demand. I think that historically speaking, ISM has been the highest correlated metric with the industry volumes. With ISM being weak for 32 out of 35 months, that lends itself to our industry volumes being challenged overall, not just us. You got to put Yellow back in the mix from when all of this started. I'd say the other kind of piece is housing and the struggles that have been there. I think that we've noticed some correlations between housing, economic factors, and volumes as well. While we don't have a lot of direct exposure there, there's a lot of indirect exposure that we get related to people buying new homes, building new homes, some of the components that go in, and things along those lines. I think it's just been sort of weakness across the board, some mode shift, et cetera, that's contributed to these unfortunate declines that we've had in our business levels. Our next question comes from Richa Harnain from Deutsche Bank. Please go ahead. Hey everyone, thanks for squeezing me in. It seems like the theme of the call is sort of this consistency that you talk about. Adam, you mentioned demand feels fairly consistent, not great, but consistent. What stood out in this quarter was you controlling what you can control, that variable cost item and optimizing your workforce that helped you deliver a nice cost out for the quarter and a better OR than what we see as your normal sequential deterioration. Maybe you can talk to us about where there's room for further optimization there. I know you're guiding to something that's worth the normal seasonality, but what can you do? I think you touched on a few things like the tech-enabled features and things like to drive better cost performance. I think, from like a salaries, wages, and benefits as a percentage of revenue, you were operating at something like 44% in the 2022-2023 timeframe. Could we see a level like that come back? Also, what prompted these cost savings now? I know employee count came down a bit, but we've been in a freight recession for some time. Why cut costs three years into the impending down cycle? That's it. Thanks. Yeah, I'd say what prompted it is we focus every day on saving costs. Whether you're in a good environment or bad, you know, that's something that you got to be focused on. I had a mentor early in my career that said, you know, if you don't focus on saving costs in the good times, you probably don't even know where to start when times get difficult. That's a focus that we have every day, and it's just part of who we are. It's part of our continuous improvement cycle as well. That's a key column in our foundation for success, as we always want to look at ways that we can get better, ways that we can invest in technologies in particular that will drive a return for the business. I think, you know, some of what we've seen in those areas, being able to manage our direct variable cost consistent with levels that we had back in 2022, I think speaks to the importance of that. We obviously run a tight ship, but you got to give your people the tools to be able to give service while also operating very efficiently. That'll be a continued focus for us. As I mentioned in my prepared remarks, the good thing in all of this, what's going to drive the long-term improvement, there's two key ingredients to long-term operating ratio improvement, and that's density and yield. Our yield trends have been consistent throughout this freight downturn. Density is obviously what we're missing out on. We need density back in the system, and it will come again. That's what's really going to create tremendous leverage for us. I think the immediate opportunity, and typically when you see our operating ratio performance, when we get into these recovery years, we've got periods where the operating ratio improves 300 or more basis points. A lot of that comes. On the overhead side, when you start getting revenue back in the system and you get leverage on all these costs that we've built up when times have been slower, depreciation in particular, I think that's where you see the immediate movement in the operating ratio. I think we've probably got a couple of years of improvement, given the level of excess capacity that we have in the service center network right now. The long-term improvement in operating ratio that we've seen has really been on the direct variable cost side, and that will be the opportunity that we have going forward. If we're already at record levels in those costs as a percent of revenue, imagine what happens if we can get double-digit volume growth back in the system, which is the type of performance that we've seen in prior up cycles. That's where those costs can continue to go much lower as a percent of revenue. You've got to be disciplined. All of these things work together. We couldn't be disciplined with our yields if we didn't have best-in-class service. It all feeds on one another, but understanding our cost and making sure that we charge appropriately based on the cost to handle freight is what gives us the confidence that we can continue to drive the operating ratio back to where it was and beyond. The next question comes from Ari Rosa from Citigroup. Please go ahead. Hi, good morning, Adam, Jack, Marty. Thanks for the time and for the question. I just wanted to ask you for a bit of color on the nature of the conversations you're having with your shippers, with your customers. How are they kind of contextualizing some of this volume weakness? You mentioned some of the uncertainties that they're grappling with. Does it feel like they've gotten more confident, less confident? I guess I'm trying to, as a lot of others have done, contextualize this decline that we're seeing in October. Is there any dimension in which they've perhaps gotten a little bit more emboldened in pushing back on pricing, given whether it's competitive pressures or pressures that they're feeling themselves on their own margins? Thanks. I think the sentiment is pretty much the same as it's been all year from a customer confidence standpoint overall. Most of them are waiting for something positive to happen. I think if you look at the backdrop of what can be set up for 2026, with lower interest rates, tariffs being consistent, at least consistent, corporate taxes being decided, I think the backdrop is very positive, and they talk positively about those things. As it relates to price, of course, we have customers that want to talk about price, but our salespeople are trained to go out and basically seek business where customers absolutely have to have on-time service with no claims, which allows us to charge a premium. As Adam said earlier, our customers do have lower weight per shipments. We don't churn a whole lot of customers, but the shipments that we are getting are about 20 lbs less per shipment than they were this time last year. There's some cautious optimism out there, and we continue to stay in front of these customers and tap what we can do for them. We're just waiting on the increase in business. The next question comes from Stephanie Moore from Jefferies. Please go ahead. Great. Good morning. This is Jo Hafling on for Stephanie Moore. I wanted to go back to, Marty, something you had mentioned at the top of the call. You mentioned a little bit about how you're using technology around workforce planning, dock management, and route planning. We don't often talk about technology in O D, so if we could just unpack what you guys are doing across those main cost buckets, what are the benefits you're already seeing, what ending do you think you're in, what's still to come, just trying to get a better understanding of everything on the tech and productivity side? Thanks. Yeah, we normally don't go in detail about our AI activities, but I can tell you some of the things that we already have in use today. Some of it is in cybersecurity with email protection platforms. As we get into more bot communications with our customers, we have to learn to manage that better to keep cyber out. From an operation safety aspect, we have implemented a line haul plan creation that allows us to study our loads quicker and obtain more pounds per truck as we move along. We analyze from a safety standpoint. We analyze our Lytx cameras with videos so that we can coach our drivers more efficiently and increase our safety. Billing automation, we have AI in our billing automation, which lowers our cost. Content creation for our sales, our people for deeper customer engagement. We also use AI for capabilities related to basic application development. Things that we're looking at in the future that we're currently researching are equipment utilization, predictive equipment maintenance, training for mechanics, just to name a few, and weather conditions so we can take better routes during the winter months. That's just to name a few of some of the things that we're looking at. All of these things we look at, we expect a return on investment. We will talk about them more as we see that happen. This concludes our question and answer session. I would like to turn the conference back over to Marty Freeman for any closing remarks. Thank you all today for your participation. We appreciate all your questions. Please feel free to give us a call if you have anything further. Thank you, and I hope you have a great day. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.