Please stand by. Good morning, and welcome to the Ryder System third quarter 2023 earnings release conference call. All lines are in listen-only mode until after the presentation. Today's call is being recorded. If you have any objections, please disconnect at this time. I would now like to introduce Ms. Calene Candela, Vice President, Investor Relations for Ryder. Ms. Candela, you may begin. Thank you. Good morning, and welcome to Ryder's Third Quarter 2023 Earnings Conference Call. I'd like to remind you that during this presentation, you'll hear some forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to changes in economic, business, competitive, market, political, and regulatory factors. More detailed information about these factors and a reconciliation of each non-GAAP financial measure to the nearest GAAP measure is contained in this morning's earnings release, earnings call presentation, and in Ryder's filings with the Securities and Exchange Commission, which are available on Ryder's website. Presenting on today's call are Robert Sanchez, Chairman and Chief Executive Officer, and John Diez, Executive Vice President and Chief Financial Officer. Additionally, Tom Havens, President of Fleet Management Solutions, and Steve Sensing, President of Supply Chain Solutions and Dedicated Transportation Solutions, are on the call today and available for questions following the presentation. At this time, I'll turn the call over to Robert. Good morning, everyone, and thanks for joining us. I am very proud of our team for delivering another quarter of strong performance despite continued challenges in the freight market. Our operating results continue to demonstrate that the transformative changes we've made to de-risk our business model, enhance returns and free cash flow, and drive long-term profitable growth, have significantly increased the earnings and return profile of the business versus prior cycles. Results for the quarter were above our forecast, reflecting better than expected performance in used vehicle sales, lower truck maintenance costs, and better performance in our supply chain automotive business. I'll begin today's call by providing you with a strategic update. John will then take you through our third quarter results. We'll then discuss how we're managing through the down cycle while positioning the business for the cycle upturn. We'll also discuss our outlook. Let's begin on slide four. Execution of our balanced growth strategy is continuing to drive strong operating performance. The transformative changes we've made to the business model have increased our earnings and return profile versus prior cycles and provide us with additional opportunities for long-term value creation. In support of our strategy to expand capabilities and accelerate profitable growth in supply chain, we recently announced an agreement to acquire Impact Fulfillment Services or IFS. The transaction is expected to close in early November, subject to antitrust approvals and customary closing conditions. IFS specializes in contract packaging and contract manufacturing, new capabilities for Ryder in addition to warehousing. These new capabilities will enable us to expand and strengthen relationships with our existing customers, particularly in our CPG industry verticals, as well as attract additional customers across other industry verticals such as retail, health, and beauty. IFS also brings its blue-chip customer base, which will benefit from access to Ryder's capabilities as a fully integrated port-to-door logistics provider. I look forward to welcoming IFS employees and customers to Ryder very soon. Our initiatives remain focused on enhancing returns. Adjusted ROE of 21% for the trailing 12 month period remains above our high teens target and reflects strong market conditions in FMS as well as our initiatives. These initiatives include pricing and cost recovery actions, which benefited returns in all segments. Our outlook for ROE remains strong, and we expect to end 2023 at the high end of our high teens target, despite ongoing weakness in the freight environment. All three business segments achieved target EBT margins for the second consecutive quarter, and our enhanced asset management playbook is enabling us to generate higher earnings in each phase of the cycle. Our strong balance sheet and solid investment-grade credit rating continue to provide us with ample capacity to pursue targeted acquisitions and investments, as well as return capital to shareholders. During the quarter, we repurchased 1.5 million shares under our repurchase programs and completed the 2 million share discretionary program authorized in February of this year. Our board recently approved a new 2 million share discretionary repurchase program, as well as a new 2 million share anti-dilutive program that replaces a recently expired program. Since the beginning of 2021, we have repurchased approximately 15% of our outstanding shares. Our full-year free cash flow forecast remains at approximately $100 million, and reflects high lease replacement activity and the accelerated timing of OEM deliveries. Turning to slide five, I am very proud to share the results of this slide because they clearly illustrate the increased earnings and return profile that has resulted from the actions we've taken to de-risk and optimize the model, enhance returns and free cash flow, and drive long-term profitable growth. In 2018, prior to the implementation of our balanced growth strategy, we generated comparable earnings per share of $5.95 and ROE of 13%. This was during peak cycle conditions. At the time, the majority of our $8.4 billion of revenue was from FMS. Supply chain revenue had a three year growth rate of 16%. Operating cash flow was $1.7 billion. Now let's look at Ryder today. In 2023, during a freight cycle downturn, our transformed model is expected to generate meaningfully higher earnings and returns than it did during the 2018 peak. Comparable EPS is expected to be between $12.60 and $12.85, compared to $5.95 in 2018, and ROE is expected to be at the high end of our high teens target, well above the 13% generated in 2018. Through organic growth, strategic initiatives, and innovative technology, we've shifted our revenue mix towards supply chain and dedicated, with 55% of 2023 revenue expected to be from these asset-light businesses, compared to 44% in 2018. Supply chain three-year growth rate is currently forecasted to be 24%. As a result of profitable growth in our contractual lease, supply chain, and dedicated businesses, operating cash flow is expected to grow from $1.7 billion in 2018 to $2.5 billion this year. As shown here, the business is outperforming prior cycles, even when comparing prior peak to current downturn conditions. I'm proud and encouraged by the results of our transformation thus far, and I'm confident that with continued execution of our balanced growth strategy, there will be incremental benefits well beyond 2023 for our customers, employees, and shareholders. Slide six highlights four key attributes of our transformed business model that we believe position Ryder for long-term value creation and a more resilient earnings and return profile. First, we continue to operate in large addressable markets with secular trends that favor the outsourcing decision. Only approximately 5%-25% of the U.S. markets in which we operate are currently outsourced, providing us with plenty of runway for growth. Increased market demand for supply chain resiliency, nearshoring and reshoring trends, labor challenges, and complex vehicle technology all make it more difficult for companies to continue performing the services we provide on their own, and therefore, create new opportunities for logistics and transportation outsourcing. Second, over 85% of our operating revenue is recurring and supported by a high-performing portfolio of long-term contracts for lease, dedicated, transportation, and supply chain services. We have de-risked our ChoiceLease portfolio by lowering pricing residuals from where they were in 2017. This significantly reduces the reliance on used vehicle proceeds needed to achieve targeted lease returns and results in higher cash flows coming from more stable and predictable lease payments. Returns on our ChoiceLease portfolio have also been enhanced by expanding pricing spreads that are better aligned with customer segmentation. Approximately 70% of our lease portfolio has already been priced under this updated model, and an additional 10% is under contract and waiting vehicle delivery. This initiative is expected to be fully implemented by 2025, with an estimated total annual benefit of $125 million. We've also diversified our supply chain revenue base through strategic acquisitions and organic growth, increasing our portfolio and industry verticals with favorable long-term trends such as CPG and omnichannel retail. We remain focused on managing costs and leveraging scale to drive efficiencies. By the end of 2022, we had generated over $100 million in annualized savings from our multiyear maintenance cost savings initiative compared to 2018. In 2023, we implemented additional actions that have provided incremental earnings benefits. Across all segments, we continue to evaluate ways to leverage our scale and overhead costs, and we continue to utilize the zero-based budgeting process to prioritize spending decisions and fund strategic initiatives. Finally, our capital allocation discipline focuses on investments that support our balanced growth strategy. This includes moderate FMS lease growth at higher returns, which has increased our expected free cash flow profile, with positive free cash flow expected in most years and over the cycle. Over the past five years, we've completed approximately $1 billion in strategic acquisitions, primarily in SCS, which have added or expanded capabilities in targeted growth areas such as e-commerce fulfillment, last mile delivery of big and bulky goods, and multi-client warehousing. In addition, we've invested in innovative technologies such as RyderShare, our visibility and collaboration platform. RyderShare brings value and increased efficiencies to our customers and has been a key differentiator in winning approximately 35% of new sales in Supply Chain and Dedicated. Overall, we believe these attributes result in a more resilient model with ongoing growth momentum. I'll turn the call over to John to review our third quarter performance. Thanks, Robert. Total company results for the third quarter are on page seven. Operating revenue of $2.4 billion in the third quarter, up 1% from the prior year, primarily reflects contractual revenue growth in all three segments, partially offset by lower rental revenue. Comparable earnings per share from continuing operations were $3.58 in the third quarter, down from a record $4.45 in the prior year, reflecting expected weaker market conditions in used vehicle sales and rental, partially offset by strong supply chain results. Return on equity, our primary financial metric, was 21% and remained above our high teens target. The year-over-year declines reflect weakening used vehicle sales and rental market conditions, partially offset by our returns initiatives. Year-to-date, free cash flow decreased to $32 million from $887 million in the prior year due to increased capital expenditures and lower used vehicle sales proceeds. Prior year included $300 million in year-to-date proceeds from the U.K. exit. Turning to fleet management results on page eight. Fleet Management Solutions operating revenue decreased 3% due to lower rental demand and as a result of the exiting of the U.K., partially offset by higher contractual revenue from ChoiceLease and SelectCare. Pre-tax earnings in fleet management were $169 million and down year-over-year as anticipated. Prior year results reflect record pre-tax earnings in fleet management, largely due to elevated market conditions in used vehicle sales and rental. Lower used vehicle pricing in the quarter was partially offset by higher sales volumes. Rental utilization on the power fleet of 75% was in our mid- to high-70s range, but down from prior year record levels of 83%. Lower utilization was partially offset by a 1% increase in power fleet pricing. Despite a weaker used vehicle sales and rental environment, fleet management EBT as a percent of operating revenue remained strong at 13.4% in the third quarter, at the high end of the segment's long-term target of low double digits. For the trailing 12 month period, it was above target at 15.4%. Page nine highlights used vehicle sales results in North America for the quarter. As anticipated, market conditions for used vehicle sales continued to weaken from elevated levels in the prior year. Compared with prior year, used tractor proceeds declined 31%, and used truck proceeds declined 30%, reflecting weaker freight conditions. On a sequential basis, proceeds for tractors decreased 8%, and proceeds for trucks decreased 6%, both better than our expectations. During the quarter, we sold 6,500 used vehicles, up sequentially and versus prior year. Used vehicle inventory increased to 7,800 vehicles at quarter end and remains in line with our target inventory levels of 7,000-9,000 units. Increased sales volumes and inventory levels reflect higher lease replacement and rental de-fleeting activity. Although used vehicle pricing declined, proceeds remain above residual value estimates used for depreciation purposes. Slide 21 in the appendix provides historical sales proceeds and current residual value estimates for used tractors and trucks for your information. Turning to Supply Chain on page 10, operating revenue increased 9%, reflecting new business and increased pricing. Double-digit revenue growth in automotive, consumer packaged goods, and industrial verticals more than offset softer volumes in our omnichannel retail vertical. Supply Chain earnings increased 14%, reflecting operating revenue growth and lower incentive-based compensation costs, partially offset by lower volumes in the omnichannel retail vertical. Supply Chain EBT as a percent of operating revenue was 9% in the quarter, at the high end of the segment's high single-digit target range. Moving to Dedicated on page 11, operating revenue increased 3%, primarily reflecting the recovery of inflationary costs. Dedicated EBT was generally in line with prior year. EBT benefited from inflationary rate increases, partially offset by lower gains on sales of vehicles. We continue to see favorable driver conditions as the number of open positions and time to fill for our professional drivers improve. Dedicated EBT as a percentage of operating revenue of 8.5% in the quarter, was in line with the segment's high single-digit target. We expect slower contract sales activity in Dedicated in the near term, consistent with a softer freight environment. As previously noted, we expect 2023 segment revenue growth to be below our high single-digit target range. Segment EBT% is expected to remain in line with our high single-digit target range for the remainder of the year. Turning to Slide 12, year-to-date lease capital spending of $2 billion was up from prior year, reflecting increased lease replacement and growth activity, as well as the accelerated timing of OEM vehicle deliveries. Year-to-date, rental capital spending of $388 million was below prior year's planned. Our 2023 forecast for lease capital spending of $2.6 billion reflects higher lease replacement and growth capital versus prior year. Lease growth is expected to be lower than our prior forecast as customers delayed decisions in the current environment. We now expect the ending lease fleet to be up approximately 5,000 vehicles versus prior year, while ending active fleet is expected to be up approximately 2,500 vehicles, reflecting an elongated delivery cycle for trucks. Delivery time frames for tractors are now at normal levels. In rental, our ending fleet is now expected to be down 13% or 5,300 vehicles, reflecting higher rental deployment activity. Our full year 2023 capital expenditures forecast of approximately $3.2 billion is unchanged from our prior forecast. We continue to expect proceeds from the sale of used vehicles of approximately $800 million in 2023, down from prior year, which included $400 million of proceeds related to the U.K. exit for the full year. Full year 2023 net capital expenditures are expected to be approximately $2.4 billion. Turning to Slide 13, our 2023 full year forecast for free cash flow is unchanged at approximately $100 million and reflects the accelerated timing of OEM deliveries and the corresponding increase to lease capital expenditures. The forecast for operating cash flow remains at $2.5 billion. As shown, the trajectory of our cash flow continues to improve over time, reflecting growth in our contractual supply chain, dedicated and lease businesses, which comprise over 85% of Ryder's operating revenue. Free cash flow profile has changed significantly since the implementation of our balanced growth strategy. Since 2020, lower targeted lease growth, as well as the COVID effects and OEM delays, resulted in lower capital spending and higher free cash flow. Proceeds from the exit of the U.K. FMS business also benefited free cash flow in 2022. The summary on the right side of the slide illustrates the strong free cash flow generated by the business prior to investing in fleet growth. In 2023, we expect to generate approximately $100 million in free cash flow, and prior to investing in growth capital, this number is expected to be approximately $500 million. Our capital allocation priorities remain unchanged and are focused on supporting our strategy to drive long-term profitable growth and return capital to shareholders. Our top priority is to continue to invest in organic growth. Strategic acquisitions have been a key contributor to accelerated growth in SCS and have helped transform our supply chain business in terms of expanding capabilities as well as rebalancing our vertical mix. Balance sheet leverage of 214% was below our 250%-300% target and continues to provide ample capacity to fund organic growth and targeted acquisitions, as well as to return capital to shareholders through share repurchases and dividends. With that, I'll turn the call back over to Robert to discuss our enhanced asset management playbook and outlook. Thanks, John. Slide 14 provides key highlights from our enhanced asset management playbook, which is focused on optimizing returns over the cycle from our transactional used vehicle sales and rental businesses. In response to weakening used vehicle and rental demand, we are redeploying underutilized rental vehicles to fulfill lease, dedicated, and supply chain contracts. In 2023, we expect to redeploy between 3,000 and 4,000 units to align our rental fleet with demand conditions. This elevated level of redeployment activity is enabling us to fulfill lease contracts sooner and is also contributing to lease fleet growth. We expect rental power fleet utilization for the full year 2023 to be at the lower end of our target range of mid- to high 70s. In used vehicle sales, we're leveraging our expanded retail sales network. Since 2019, we've increased our retail sales capacity by 50% by adding physical locations and increasing our inside sales team to capture digital sales opportunities. Increasing retail sales volume benefits results as wholesale proceeds have historically been at a 30% discount to retail proceeds. And finally, we continue to shift our vehicle mix and rental towards trucks, where we see stronger demand trends that have historically been more resilient than those of tractors. We've reduced our 2023 rental tractor fleet by 18%. By year-end 2023, we expect that trucks will be approximately 60% of the North American rental fleet, up from 49% in 2018.... Although earnings will be impacted by the freight environment, the successful execution of our enhanced asset management playbook has enabled us to effectively manage through the 2023 freight down cycle and generate higher earnings in each phase of the cycle. Turning to slide 15. In addition to managing through the downturn, we're also focused on positioning the business to benefit from the cycle upturn. Although the majority of our revenue is supported by long-term contracts that generate relatively stable and predictable cash flows over the cycle, each business segment has opportunities to benefit from the cycle upturn. The majority of our cyclical exposure resides in fleet management with rental and used vehicle sales. Our enhanced asset management playbook has been focused on managing these transactional businesses during the freight downturn, while also positioning them to benefit from the cycle upturn. Improved freight conditions should increase demand for rental and used vehicles. In rental, we intend to grow the fleet as we approach the cyclical upturn to capture this incremental revenue and margin opportunity. In used vehicle sales, we'll continue to leverage our expanded retail sales network in order to maximize proceeds, with the potential to generate used vehicle gains above normalized levels. An additional opportunity on the horizon for FMS is the potential pre-buy activity ahead of the 2027 EPA engine technology changes. The industry is generally expecting some level of pre-buy activity, given the expected impact on upfront costs and maintenance cost implications. Based on what we see today, pre-buy activity could begin as soon as 2025, as we have historically seen higher levels of fleet growth a couple of years ahead of a change. We also would expect used vehicle pricing to be supported by demand for the old emissions technology. Increased engine complexity and costs generally favor the outsourcing decision, which would benefit lease sales activity. In Dedicated, improved driver availability and lower recruiting and turnover costs have benefited 2023 earnings, but have been a headwind for new sales and revenue growth. As the freight cycle strengthens and driver availability becomes more challenging, we expect to see incremental sales opportunities and improved revenue growth in DTS as private fleets seek solutions to address this pain point. In Supply Chain, weaker volumes in our omnichannel retail vertical have been headwinds to revenue and earnings during 2023. We continue to believe in the long-term growth prospects of our e-commerce fulfillment and last mile delivery of big and bulky goods, and have invested in technology as well as an expanded footprint to support this business. We expect supply chain results to benefit as omnichannel volumes recover and the incremental footprint is leveraged. We've been pleased with the improved resiliency of the model and outperformance during a down cycle, and are appropriately positioning all three segments to benefit from the upcycle. Turning to page 16, we're raising our full-year 2023 comparable EPS forecast to a range of $12.60-$12.85, up from the prior forecast of $12.20-$12.70. Our increased forecast reflects better than expected performance in used vehicle sales, ongoing maintenance cost improvements, and supply chain automotive performance, partially offset by weakening conditions in rental and omnichannel retail. We're also providing a fourth quarter comparable EPS forecast of $2.60-$2.85 versus a prior year of $3.89. Our 2023 ROE forecast is 18%-19%, which is at the high end of our long-term target of high teens and above our prior forecast of 17%-19%. Our strong 2023 earnings reflects the transformative changes we've made in the business model. The year-over-year decline is primarily due to weaker market conditions in UVS and rental relative to prior years' elevated levels. As a reminder, our full year 2023 GAAP EPS forecast includes approximately $3.96 from the cumulative currency translation that was recorded in the second quarter. Turning to page 17, we believe Ryder is well positioned to increase shareholder value. We see significant opportunities for profitable growth supported by secular trends, our operational expertise, and ongoing momentum from multiyear initiatives. We've made transformative changes to our business model and continue to demonstrate strong execution on our balanced growth strategy, which has enabled us to achieve our long-term targets, increase business model resiliency, and outperform prior cycles. We remain committed to investing in products, capabilities, and technologies that will deliver value to our customers and our shareholders. That concludes our prepared remarks. Please note that we expect to file our 10-Q later today. We had a lot of material to cover today, so please limit yourself to one question each. If you have additional questions, you're welcome to get back in the queue, and we'll take as many as we can. At this time, I'll turn it over to the operator. Thank you. If you'd like to ask a question, please signal by pressing star one on your telephone keypad... If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press star one to ask a question. We'll pause for just a moment to allow everyone an opportunity to signal for questions. We'll go first to Jordan Alliger with Goldman Sachs. Yeah, hi, morning. So you guys get to see the economy from a pretty broad array of businesses, lease, supply chain, rental, et cetera. Can you maybe give a bit of an assessment, what you're thinking in terms of a bottoming and turn in the freight cycle? Yeah. Hi, Jordan. Listen, I think, as we see it now, as we see things have continued to decline, the freight cycle is probably nearing a bottom here over the next quarter or two. We're assuming that, it'll remain soft probably through the middle of next year, and then as we get into the back half of next year, we would expect things to start to come back up. Also, I would tell you, as you mentioned, that we do, we do have visibility across a lot of customers. And this quarter we saw, again, continued softness with the transports. Apparel, retail still seems to be relatively soft, and housing is probably not a surprise. Things like furniture, and housing support type products are down. But we do still see strength, and we did see strength in the CPG sector. In automotive, we saw automotive production really strong in the quarter and also in industrial. Industrial is a little bit of a mixed bag, but the industrial customers that we have still saw some good strength. Thank you. If you find that your question has been answered, you may remove yourself from the queue by pressing the star key, followed by the digit two. We'll go next to Jeff Kaufman with Vertical Research Partners. Thank you very much. Hey, everybody. Hey, Jeff. So congratulations. More of a bigger picture question here. You know, a lot of different views about what's going on, and I know Jordan just asked you when you see things improving. You know, we're getting some other people say, "Hey, this, this retail inventory, destock is done." We got other companies saying, "Hey, I, I don't know what's gonna happen because of this UAW situation." We're all trying to figure out kind of what's going on underneath, right, everything that's happening. Kind of along Jordan's question, if I look beyond the noise and the headlines and some of the oddities moving around, is your sense that we are bottoming here and things feel a little bit better? I think you said you don't see it getting better till later next year. But what's different about this cycle from your perspective? And, if I cut through the noise, what do you think is really happening in our economy right now through your eyes? You know, Jeff, it's a good question, and I think it's important to remind everyone that 85% of the revenues at Ryder are contractual. So yeah, I'm not saying that the cycle is not important for Ryder, because the cycle clearly impacts our used vehicle sales and our rental business. But the core business of Ryder, the contractual, choice lease, dedicated, and supply chain, I'd say, still remains strong. Certainly from an earnings perspective, as you know, in the third quarter, every one of the segments hit their earnings profit targets. We had a strong beat to the forecast. Maintenance costs came in really strong. Remember, we just delivered $100 million of maintenance cost savings. We're doing even more, and it was evident this quarter. Supply chain automotive came in stronger than we had expected, and even used vehicle sales, which we know is impacted by the cycle, came in better than what we had forecasted. We delivered 21% return on equity, even in that type of an environment, which, as you remember, our peak return on equity in the past was mid-teens. We're now saying that's gonna be our trough return on equity, so we're in a different trajectory than we have been in the past. We announced the acquisition, our plans to acquire IFS, which is, again, consistent with our strategy to grow our asset light and higher return supply chain business. It's gonna give us new capabilities in contract packaging and contract manufacturing that we can then sell to other customers within our supply chain portfolio. And then we also announced authorization of two share buyback programs. Again, continuing to return money to shareholders. We had recently announced a 15% increase in the dividend. So there's a lot of really good things happening at Ryder, even in a declining and really soft freight market. And that is, I think, what distinguishes Ryder's portfolio of businesses and business model from some of the other transports that are there. So having said all that, I would tell you, we expect those parts of our business which are impacted by the freight cycle, which are used vehicle and rental, we expect those to continue to be soft, probably going into the first half of next year, and then probably beginning to pick up in the second half. It's still too early to tell. Could come in a little bit sooner, could come in a little bit later, but that's sort of what we're planning out right now. Okay. Thank you for that answer. That's my one. Thanks, Jeff. We'll go next to Scott Group with Wolfe Research. Hey, thanks. Good morning. So when I just look at the fourth quarter guide, the Q3- Q4 drop, a bit worse than normal seasonality, is there anything of note driving that? Is that the auto strike or is there just conservatism in there? Just any color there. And then, you know, usually around now, you give us some high-level thoughts about next year. Just what are the puts and takes you see for 2024? Gains on sales, you know, any other drivers, how you think about normalized earnings next year? Thank you. Sure. Sure, Scott. Well, as you mentioned, the Q3- Q4 earnings number, you normally have a seasonal decline in Q4, sequentially, because a lot of slowdown in the back half of the quarter. So you think last two weeks of December, things really slow down. We also, as you know, in supply chain, are in the auto sector, and there's typically shutdowns for the holiday. So you have the normal seasonal decline, Q3- Q4. I think the additional decline that we have in the forecast here is primarily our rental business. We are right now expecting rental to be down more than we had expected in the prior quarter, in our forecast in the prior quarter. And again, that's just our pick right now from what we've seen in the market. We're not seeing we're not expecting a big seasonal pickup in truck rental in Q4. It could still materialize. I mean, here we are at the third week of October. It's kind of the way we're seeing it, is not a pickup, but still could happen. But that's really the difference in the Q3- Q4 guide. In terms of 2024 puts and takes, I think you asked that question in the last call. I. Not a whole lot's changed since the comments I made then. I think it's important to know that we're consistent with our balanced growth strategy. We expect our ROE next year will certainly be within our stated range of mid-teens to low twenties, depending on where we are in the cycle. So if we don't get any help from rental and used trucks, it could be in the mid-teens. If you get some help, we could be in the high teens. We expect the biggest drivers of earnings growth are going to come from the top-line growth of our contractual businesses. Remember, that 85% of the revenue, which is lease, supply chain, and dedicated. Lease and supply chain, we expect will be at their target growth rates. And just as a reminder, lease is mid-single digits, and supply chain is low double digits. Dedicated, still too early to tell. Could be off of their targets of high single digits because of the sales softness that we've seen this year. As the freight market has softened, you've got less customers really running to do dedicated. But as the freight market comes back, you're going to see, dedicated sales pick back up, and certainly we'd expect to be back at those levels. As far as the, the transactional rental and used vehicles that, that are more than tied to the freight market, again, it's still early to tell what the whole freight market's going to do, but I would expect those to have continued softness in the first half of the year and then a possible pickup in the second. I guess the, the extent of that pickup will determine, whether the used vehicle sales and rental, what the impact of used vehicle settles, sales and rental will be, on our earnings next year. But again, well, another reminder is we're going to continue to leverage our zero-based budgeting process to find other cost savings opportunities, probably throttling, maybe throttling some of our strategic investments as needed. Again, focused on making sure that we deliver on our returns commitments to our shareholders. And again, it's again, what we expect next year is to again deliver on our goals for the balanced growth strategy with higher highs and higher lows. Can I just try to ask you just maybe a little differently? So, like, you started the year saying 11-12 of earnings, and now you'll do closer to 13. How much of that incremental $1-$2 do you think is temporary or more part of, like, you know—You originally gave us a normalized earnings number, you know, a year ago. Should we just add $1-$2 to that normalized earnings number, and that's the new normal? If that makes sense. Yeah, no, I would say a good chunk of that year-over-year improvement... I'm sorry, of that forecast improvement was in used vehicle sales, right? So you saw, used truck prices did not come down as deeply as we had originally forecasted, so that's what drove a good chunk of that. The base business continued to perform really well, maybe a little bit better than what we had originally expected, but I would tell you the big improvement year-over versus our original forecast was primarily around used vehicle sales, partially offset by rental being a little bit worse than we had expected. But you still feel very good about whatever you told us was normalized earnings, that nothing's really changing there at all? Absolutely. I would tell you, more confident now than we were at the beginning of the year. Okay. Helpful. Thank you, Robert. Thank you, Scott. We'll go next to Allison Poliniak with Wells Fargo. Hi, good morning. Good morning. Robert, can we just turn to supply chain services? You mentioned the diversification that you guys have achieved so far to date. How are you thinking about diversification today? You think, is there more to do on that side? Does the mix of the mix need to shift a bit more? Just any color there. Thanks. Yeah, you know, we're coming from a business that was that really originated with automotive, right? We were very heavily into the automotive logistics business. Still a very good business for us, but we're now down where auto, I think, represents 27% of our revenues. So we've really been able to diversify into CPG. We diversified into retail e-commerce, last mile. As you saw, we now did an acquisition to, or we're in the process of doing an acquisition to, be able to offer co-packaging and co-manufacturing services to CPG and some of the other verticals. So we feel really good about where the balance is today. You're going to see us maybe do some additional acquisitions if they become available in some of the other industry verticals. But I think we have a very good balance of business across our supply chain business today. I think as is shown, as we've gone through the last few cycles, where some industry verticals have been up and some have been down, and overall supply chain has continued to improve their earnings year over year. Yeah, healthcare, I think, is another area that we are probably underrepresented right now. We've got a few, what I would call flagship accounts. We want to continue to grow that. Perfect. Thanks for the color. Thanks, Allison. We'll go next to Brian Ossenbeck with J.P. Morgan. Hey, good morning. Thanks for taking the question. Just had two quick ones. Robert, maybe you can talk about the puts and takes for used trucks, tractors in particular. It looks like if things have stabilized, maybe a little bit better than we and you had anticipated, but you got some more production ramping up. The truck wholesale market is still pretty weak, so I guess looking to see what you would need to see happen to sort of reach that residual value, which you're still above by a good amount. And then, you know, secondly, we've heard more about competition at this part of the freight cycle. Not too big of a surprise, but just wanted to see how it was trending from your perspective, especially in dedicated, where there's been some contract shifting, some share shifting, you know, based on the increased competition. So thoughts there would be appreciated. Thank you. So, Brian, thanks for the question. Look, I think on the used tractor side, we're seeing the decline that we that we had originally expected at the beginning of the year. Actually, like I mentioned earlier, it came in a little bit better than we expected, but a decline nonetheless. You've got it in our appendix as to where we are from a used truck pricing standpoint. We feel really good about where we are versus our residuals and where we think pricing can go versus our residuals, so we're not concerned on that end. I think the cycle is going to play itself out over the next several quarters. I think we've probably seen the biggest of the declines, and then you're going to see it, over time, begin to flatten out and eventually come back as the freight cycle returns. As far as new Class Eight production, that's going to be a driver as to when the used truck market bottoms out. So we think that new production will probably start to slow down as we get in the first half of next year, and that'll be helpful for new tractor—I'm sorry, for used truck prices. We're very happy about the fact that we have expanded our retail network, and we're now being able to leverage that expanded retail network to retail more of these used trucks as opposed to having to wholesale them. We're also being very cognizant of our inventory and making sure that we stay within our target range, which we're right smack in the middle of that right now. So we're going to continue to monitor that very closely and make sure that those tractors are moved out to the secondary market at good prices, but not allowing inventory to really come up. In terms of the competition, I'll tell you, yeah, as you saw, dedicated, especially in dedicated, you've seen our growth rate in dedicated has slowed down. Sales have softened. We're not seeing the same level of private fleet conversion, if you will, that we saw last year, and that's primarily because you've got a very attractive spot rate, so you got customers who are taking advantage of that. You have the driver recruiting market has gotten much easier also, and therefore, not as many private fleets needing help there. That is a temporary, I believe, that's a temporary reprieve because the driver shortage is here to stay, and I expect that as the freight market comes back, you're going to see the driver shortage really exacerbate itself again and come back up, which will drive a lot more dedicated. But in terms of competition, look, we are very disciplined around our pricing, so you're not going to see us get very too aggressive on pricing in order to win deals. We're going to win the deals where we can add value, and the customer is willing to pay for that. That's why you see that the profitability of our dedicated business still remains strong. All right. Thanks, Robert. All very helpful. Appreciate it. Thanks, Brian. We'll go next to Justin Long with Stephens. Thanks. Good morning, everyone. This is Brady Lierz on for Justin Long. I wanted to ask about the monthly rental trends through the quarter, including how you've seen October trends month to date, and maybe your expectations for utilization and rental for both the fourth quarter and early next year? Yeah, I'll hand that over to Tom to give you what we've seen in the months. But I will remind you that we talked about it on the, in the script, on the call. We have brought in the quarter, we've brought down... Actually, year-over-year, we brought down our tractor fleet in rental by 18%. That was really to match what we were seeing on the demand side. So one of the things that we're really proud of is, from an asset management standpoint, we've been able to really adjust our fleet very quickly to be able to match the demand we're seeing. So as we go into next year, we're. I mean, as we go into this quarter, we're expecting continued softness in rental, but I'll let Tom give you a little bit of color, as we are expecting some pickup in utilization in the last few couple of months as we get into the holiday season. Go ahead, Tom? Yeah, thank you, Robert. Yeah, we did mention it earlier, but the demand was a little bit softer than what we expected and forecasted in Q3. So we did continue to kind of throttle the redeployment process, and the asset and our asset management team has done a great job in executing that. We've done year to date a little over 3,000 rental to lease redeployments, which has helped us move that fleet down. We weren't necessarily expecting to need to do that much in Q3, but as we saw the demand really not be there as we forecasted, we continued to move the fleet down. So we do expect that softer demand to continue into Q4, which was different than our original forecast. Heading here into October, the numbers are, the utilization is right in line with where we expected it to be, right in the mid-70s, right around 75%, kind of flat to what we saw in Q3. Although we do expect a slight seasonal pickup in November and December, maybe a pickup that seasonally is a little bit lower than what we've seen historically. So that's currently what's in the forecast. We do expect the fleet to come down again. I think sequentially, we've got the rental fleet coming down about another 1,000 units to end the year. Okay, great. Thanks for the color, guys. We'll go next to Brian Ossenbeck with J.P. Morgan. Hey, thanks. Just a couple quick housekeeping, I guess. Robert, maybe the impact of the UAW strike, I know it's still dynamic and ongoing, but, have you seen anything yet? I think you mentioned ground count was maybe getting whittled away a little bit, but, anything from your perspective to keep in mind, into the fourth quarter? And then maybe you can just give a quick high-level view of IFS. Acquisition is still pending, but what are you hoping to get from there? Types of cross-selling, you know, how the customers are reacting to that, and I guess on the contract manufacturing side, you know, is this, should we look at this as a, margin accretive to supply chain, or is it sort of in line with the segment? Thanks. Okay. Thank you, Brian, for the question. First, around the UAW, the impact so far has been immaterial. As you know, as I just earlier mentioned, that about 27% of our supply chain business is automotive. It is an important part of our business, but we have a pretty good balance between union and non-union end customers. So as we go into the balance of the quarter, we've built some of that, what we'd expect might happen in there. But I think even if you look at, even under the worst case scenario, we're probably covered within the estimate that we've given you. So, I guess less of a big concern for us right now. Then under IFS, we are very excited about the opportunity here, so I'm going to let Steve give you a little bit of color on IFS and how it fits into our supply chain portfolio. Thanks, Robert. Yeah, Brian, really excited about IFS. You know, I would think of it as an on-ramp for our customers. So we do this in just a few locations in our warehouses today, but this is additive to the pipeline. So there is a pretty good sized pipeline in their portfolio that we do not participate in today, so we think that's very exciting. It does fit into our port-to-door strategy. As you think about this business, it is, you know, it is complex, and it is sticky with those customer relationships. So, you know, that, that's attractive to us. Again, 15 locations across the U.S. Nine are multi-client, which we can serve, you know, small startup companies and large companies that have run out of capacity, and then six dedicated customer operations, so almost 4 million sq ft. We would like to welcome the team. A team of about 1,000 employees will join Ryder here in the next few weeks, and really excited about meeting them and getting them as part of Ryder. Yeah, Brian, the only other thing I'd add to that, it is accretive to our results going into next year, somewhat accretive. And then from a margin standpoint, I would say is in line with our supply chain margins longer term. Okay, great. I appreciate all that. Thanks, guys. At this time, there are no additional questions. I'd like to turn the call back over to Mr. Robert Sanchez for closing remarks. Okay. Well, thank you, everyone. Thanks for the questions and your interest in Ryder, and look forward to seeing you as we get out on the road. Thank you. Be safe. This does conclude today's conference. We thank you for your participation.