Morning, everyone. Thank you all for joining us today. I'm Scott Schneeberger, the Senior Industrial and Transportation Services Analyst at Oppenheimer. It's our pleasure to have RXO here to speak on the company's investment story. We have with us from the company CFO Jamie Harris and Senior Market Strategist Kevin Sterling. RXO is a leading tech-enabled transportation brokerage platform, with truck brokerage the cornerstone asset. RXO's truck brokerage business is an industry leader with differentiated technology applications, contributing to above-industry growth as well as solid margin. We'll be using a fireside chat format. I'll ask management some high-level questions upfront, get us an overview of the business. Later in the session, I'll facilitate questions from the audience. So getting it started, gentlemen, to set the tone, please provide an overview of the services RXO provides and the primary end markets it serves. Hey, Scott, thank you very much for having us. You know, RXO, as you as you mentioned in your opening, tech-enabled asset-like business, really focused on logistics, serving through our primarily our full truckload brokerage business. We also have a component that serves the LTL market. If you look at our total brokerage business, it represents about 60% of our total revenues. Full truckload's about 83% of our volume. Less than truckload represents about 17%. We also offer services in last mile, which is a home delivery, you know, crossing the threshold for delivery of, you know, heavy goods into a consumer's home. That represents, just over 20% of our business. And then we also have a managed transportation business that companies will outsource their oversight and, and execution of transportation to us, which is a nice business. And then we also provide freight forwarding, which is, you know, we do ocean freight. We do a lot of domestic services. In fact, domestic services is now over 50% of our freight forwarding business, highlighted by one of the we have a facility in Laredo, Texas, which is there to help, help our customers clear the clear customs at the Mexican border, you know, with oversight at an international bridge. So, have a nice array of services. We can service all needs of the customer base. You know, we service, our largest segment, is, is consumer and retail. We have a nice mix of industrial, healthcare, transportation, and logistics. And so we, you know, we really service a wide variety of end users. And, Scott, let me piggyback on that, what Jamie said. Our services are very complementary to each other. In the majority of our customers use multiple of our services. And so it's interesting. When you look at our P&L, we have the brokerage business, and we call the other lines of business that Jamie's talking about complementary lines of business, because they are very complementary. And it allows us to create great cross-selling opportunities among our business lines. So, you know, they really do work hand in hand with each other. Hey, thanks. Good overview, guys. Appreciate it. The truck brokerage industry, it's historically increased penetration within the for-hire truckload market. Could you please discuss that secular trend and the underlying drivers thereof? Scott, let me, let me take that one. You and I've been, you know, around this industry for a very long time. If you think back 10 or 15 years ago, the brokerage industry, the penetration was only roughly, call it, 10%-12%. Today, it's north of 20%, I think, approaching 25%. So brokers continue to penetrate this massive for-hire, $400 billion over-the-road truckload market. Why is that? That's because brokers today look and act, smell. You know, we, we really look like an asset-based carrier to a shipper. We're viewed now as a core carrier. Years ago, a broker essentially kind of was a dirty word. Shippers didn't want to use them. They wanted to use their core asset-based carriers. But that's changed through technology, through, through a massive scale that we have. So, you know, when shippers now we're bidding on freight, we're bidding against asset-based carriers because we really do look and act like an asset-based carrier. We've got great technology, massive scale, so we can meet all those shippers' needs. And so they think of us now as a core carrier, probably more so as a core carrier than a broker, per se. So, you know, just think back how much that industry penetration has more than doubled in 10, 12 years. And, I know Jamie and I feel this way, you know, that, that it will continue to increase. Brokers will continue to penetrate this for-hire market. And so it's, it's great for us to see that, you know, shippers view us as a partner. I'm going to brag on Jamie a little bit. In his previous life, he used to be a shipper at Coke. And, you know, he'll tell the story that, you know, years ago, they didn't want to use a broker. But now that mindset has really changed based upon the things that I told you about. Yeah, Scott, I'd add to that as, you know, my background's shipper as a shipper from a number of companies. Over time, with as economic cycles have compressed, the demand supply-demand curve moves rapidly in today's microeconomy versus, you know, five, 10, 20 years ago. It's very important that shippers establish, you know, brokers, which really are an aggregator of massive capacity. It's really important that they bring them into their core portfolio of carriers so that, you know, brokers and their related carriers become familiar with the distribution centers, familiar with the distribution systems, the computer systems that we interface with, so that when we they do have a shipper does have peak demand or special projects, we're the place they go for capacity. And so it's so important that we become part of the normal portfolio. Over time, that has continued to penetrate its way into an ever larger part of the portfolio. Thanks, guys, for that technology, it's been a primary focus ever since we started covering your business over 10 years ago when it was still under XPO's umbrella. We witnessed the early days of RXO's Freight Optimizer technology. It remains a backbone in the organization. From an RXO has led the digital evolution in the industry and has garnered an early mover advantage. I think that it's still sustaining. If you could please speak to RXO's opportunity and potential to maintain its digital differentiation, please. Well, that Scott, that has clearly been a backbone of the company, and it continues to be a backbone of both our service delivery, our information communication at the end of just truck loads and provide ship both shippers and carriers with, you know, real-time access to information, which is so important in the logistics business. We continue to heavily invest in technology. You know, we're at the forefront of a number of items. You know, we're doing a lot of AI work that helps, you know, make the process simpler. I mean, we quote a stat that you've heard before. 97% of our loads are either created and/or covered digitally. That's something that, you know, if shippers want to be able to provide, you know, kind of orders, if you will, or put loads on the board that, you know, electronically to reduce the manual, you know, kind of the manual work. That being said, a backbone of our company also is combining that technology with the customer service human-to-human relationship aspect. You know, as you ship loads and, you know, we're doing, you know, not just one and not just 10, but hundreds and thousands of loads a day, you know, with the same shipper, it's so important that the shipper be able to have somebody to talk to, to solve problems and to plan. because, you know, we kind of talk internally that there's a lot that goes on between point A and point B of a truck going from the distribution center to its end destination. And so having that relationship to be able to problem-solve, combined with technology to make those routine tasks simple and easy to use, is so important. And that continues to be our largest spend internally in terms of our technology, and our innovation. And so it will continue to be the backbone of this company for a long, long time. But I cannot emphasize or overemphasize enough the importance of the customer-human relationship that combines with technology to differentiate us. Yeah, I would just agree with everything Jamie said there, Scott, that, you know, we view technology to really help our people become more productive and efficient, not to replace our people, just to help our people get better. You know, and that's always a goal of our technology. And as Jamie mentioned, you know, we'll continue to make those technology investments year after year, regardless of where we are in the cycle, because it's important to always stay ahead. As soon as you stop investing in technology, you're going to get past pretty quickly. So we want to make sure we're always at the forefront of technology. We're constantly sending out surveys to shippers and carriers. What do they want? Based upon that feedback, you know, we will weave a lot of that into our technology. So we're always making sure that we're not building it for ourselves, but for our end users, the shippers and the carriers. And it's fascinating. You know, you talked about covering this company, you know, early on in its infancy, and you and I both were there. And, you know, it's neat to kind of see that we work if you think about it, probably the original technology disruptors, you know, 10, 12 years ago. And, that's just neat to see. And so that's really kind of given us that, that leader in the clubhouse advantage, that first mover advantage. Yeah, certainly. Great, guys. Appreciate that. Let's jump in on the business itself and truck brokerage. If you could just provide an overview, where are we right now in the cycle? And I'll follow that up with just the comment that RXO has delivered elevated volume growth for multiple quarters, despite what is currently a challenging transportation market and overall industry volume declines. If you could just speak to an overview of the drivers and the perspective of the company's competitive differentiation and strategy, throughout different stages of the economic cycles, too. Thanks. Yeah. We, as you know, we've been in a now a prolonged freight downturn or soft market for freight. It, just kind of start on the demand side of the curve briefly. You know, macroeconomically, you know, I would categorize the economy as good, not great, with pockets of high optimism and pockets of concern. If you look at some of the macro numbers, GDP has done pretty well, although it came down in its most recent report slightly. The report we had last week on jobs was actually encouraging in terms of the fight towards inflation. But, you know, that inflation's been very sticky. You know, if we roll the clock back six months, I think we all were, you know, optimistic and hopeful to see maybe two, three, even potentially four rate cuts. I think that has clearly been scaled back. If you go back a week ago, people would probably say none. Now, you know, kind of who knows? But maybe we get one later in part of the year. I think that, you know, where that lands over the next, you know, 60, 90 days will be very important, what plays out with the macro. Of course, we have a presidential election coming up. Industrial production has ticked up. PMI, you know, crossed over the 50% threshold recently for the first time in a number of quarters. The logistics index has peaked up towards the 50% range and above. Also, you know, if you look again across the macro, I'd say good, not great, pockets of optimism, pockets of concern. If you translate that into the freight market, that has not translated into freight demand quite yet. Cass index is still showing, you know, down, you know, mid-single digits year-over-year. I mean, I think, you know, if you go into the trucking piece of that index, you know, roughly half LTL, half full truckload. So you probably think that the truckload's down a little bit further than what Cass index is showing. You know, you go back to the consumer data, the consumer is spending more money, relatively speaking, on services than they have in a long time. You know, of course, goods really took off during COVID. There's been a downtick since COVID of those goods purchased in place of services. And, you know, as we say internally, you know, we can't. We don't haul Taylor Swift tickets. You know, we don't haul experiences. We haul goods. And so that does translate into volume, which ultimately drives the demand side of the equation. But I think if you look at what's out there, the bigger the bigger issue is still a lot of capacity, a lot of excess capacity that's that's left over from the COVID, you know, influx of capacity into the market. We are seeing carrier exits, accelerate. We saw that accelerate in the first part of the year. It actually ticked down, even reversed later January, early February. We're seeing an uptick in exits again. The last data I saw was Class 8 orders were kind of scaling back a little bit. So, you know, what we're really we're really watching all of those factors, but probably more so on the supply side, more so than the demand side. We think that's really the one metric that's got to come into balance for the rate piece of the puzzle to become more into equilibrium again. And Scott, I would just add to that, too, just kind of speaking of cycles. You know, I've been around this industry a long time, and there's always been a cycle, and there will always be a cycle. There's always been a cycle since deregulation in 1980. So I promise everyone who's listening out there that as bad and dire as it is right now, good there are good times around the corner. We just don't know exactly when. No one will ring a bell and tell us, but it will happen because there's always been a cycle since deregulation in 1980. There'll be another one, too. So it's a matter of when, not if. Scott, the back half of your question about, you know, what are we doing and what are the levers that we're focused on? We have had nice volume growth over the last, you know, several quarters, been in double digits. Most of the quarters, last quarter, were around 11. You've seen a higher growth percentage year-over-year in our LTL business, although our truckload has still been very, very strong and the best in the industry. You know, our strategy is, you know, very simple. It is to make sure we're servicing our customers well, that we are doing business with, you know, we do business with over, you know, I think 58 of the Fortune 100 companies. We do business with over 200 of the Fortune 500 companies. We want to make sure that we're kind of in the game, you know, part of the portfolio, part of the core carrier network, so that when this market does turn, that we are there to be called upon. And so we do our best to make sure that we are servicing the customer well, that, you know, we're always going to be priced at or, you know, better than the market. And, in terms of being able to make sure that we, you know, honor those commitments that we've made in the contractual relationship, so that when the market does turn, that we're there to take the project, to take the spot loads, and, you know, benefit from that. Because think about, Scott, who are our customers going to turn to when the market does inflect, when they have the additional spot opportunities, special project work that Jamie talked about? It's us because they know us. They trust us. We've serviced their freight. Service is such an important element to our customers these days, that service, that visibility. So there's that trust factor that they know that if they give it to RXO, that, you know, we're going to be there and deliver for them. Great. Thanks, guys. Before I go on, and it's actually a segue from what you were both discussing, but one other thing I heard in there, Jamie, that I'd like to follow up on. You said you're watching demand closely, obviously, and we're just kind of waiting for that to rebound. But the supply side comments were interesting, and you said you really do focus on that. What do you anticipate? What do you see occurring with regard to supply in the industry over the next few quarters of balance of this year? Scott, you know, I think we all in the industry have been surprised that the supply of the excess supply has lasted as long as it has. Because if you look at the carrier cost to run a truck, regardless of whether you're running one truck, five trucks, or you've got, you know, scaled and have 100 or 500 trucks, it costs a certain amount of money to own the truck, pay insurance, do repairs, pay drivers, etc., etc. So we've actually been surprised that drivers have been able and companies have been able to, you know, be willing to half rate at some of the rates. There's been a lot of tenacity, a lot of persistence, perseverance, if you will, in the market. You know, we go back to, I think, a lot of the carriers during COVID had a lot of business, very, very attractive rates, did well financially. Balance sheets entering this downturn were pretty strong. And I think you look at the drivers and the carriers out there, you know, how what they see in the future and, you know, maybe holding on longer than, I think, folks had anticipated. At some point, it becomes sustainable. Rather than really, you have one truck or 100 trucks, it becomes unsustainable to continue to operate at these cost levels. And so, that is part of the, you know, the balancing of this supply-demand equation that this industry lives in. And, we're watching both. We think that both supply exiting and demand picking up is clearly a formula for success and to get back to equilibrium quicker. But if you had to judge the two, there's probably a bigger emphasis on overcapacity than the demand side. Thanks. Appreciate that. Let's follow up on some of your other comments. Let's get into what's the potential magnitude of EBITDA growth for RXO upon a rebound in the truck brokerage cycle? We think significant, Scott. On our last earnings release and our last call, you know, we talked a lot about cost structure as an example. We've taken this opportunity over the last 18 months to really make sure that our cost structure was well positioned for the long term. When we came out of spin, you know, we inherited a division that was spun off into a separate standalone public company, as you know, and we had a kind of on paper what we believe the cost structure should be. But as you've been in running the business now for 18 months, it's, you know, obviously much cleaner and much easier to see it operate day to day and understand how can we become more efficient and more productive, if you will. Jared talked about in our remarks, we saw productivity on our brokerage team go up about 18% on a rolling 12-month basis, as an example. So we're getting more productive with our technology spend. On On the back office calls, you know, this year, we're going to take out an excess of $35 million annually. So if you put the cost side together and then you go back to the comments about what we're doing from a customer service and making sure that we're in the contractual contracts, servicing our customer well, growing volumes when the market does inflect, you know, we estimate an excess, well, an excess of 60% flow through from the gross margin line down to the EBITDA line. So the contribution to the bottom line with growth and with price, you know, equilibrium can be significant. Great. Thanks, Jamie. Let's talk. You guys highlighted up at the beginning of, in the overview of the business, but RXO's expanded cross-border capabilities. It seems like a logical move considering nearshoring trends. If you could discuss RXO's strategic positioning, potential to garner incremental new business, how meaningful that business can become over time? We think the cross-border is going to be significant. The, you know, the macro trend that we read about, hear about, and we're actually seeing on the ground is a move to Mexico for a lot of, you know, manufacturing that had previously maybe taken place in Asia. You know, I think historically, if you look at the southern border, it's been predominantly or led by automobile companies locating vendors or, you know, manufacturing components in Mexico and coming across the border. We service a lot of those customers currently. A lot of that business is still in the U.S. is done on a just-in-time basis. So, it's crucial for the transportation network to be working well. We did invest. I think go back two years ago, we opened a 126,000 sq ft distribution center in Laredo. It's a cross-dock operation that really services volume coming in from Mexico, clears customs, and then is distributed out to its ultimate destination. You know, the border towns like Laredo, like El Paso, have boomed over the last few years with, you know, similar type facilities. So we feel like we're very strategically positioned. I've actually been down in Monterrey twice this year just to visit our offices. We have a brokerage office in Monterrey, and we have a managed transportation office in Monterrey that services our current client base, our current customer base. And we think the opportunities are very large. And, you know, I'd say we, like, you know, many companies are, you know, really watching the market closely and beginning to understand, you know, where we need a facility, where we need to invest. The good news about RXO is we have a very, very good customer base as we begin that, you know, next phase of strategic evolution, you know, in Mexico. Scott, I would just add, Jamie came back after his Mexican trips, just fired up by the opportunity. Lots of opportunity. And, you know, look, we have a great workforce in the U.S.. There's also a very good workforce in Mexico. You know, a lot of young people that are there that, you know, to call upon. It's perfect for the type business that, you know, we operate in logistics. Excellent. Thanks, guys. I and folks out there, feel free. I believe there's capability to send through questions to us. And I do have one on staying in the truck brokerage business. I want to kind of revisit, you have discussed the, you know, taking share and growing volume in this challenging time. And it sounds like LTL, and this is what the question is, LTL sounds like it's been pretty strong, truckload hanging in, but not to the same magnitude. If you could talk about the, you know, the low double-digit volume growth, what's the contribution from LTL? What's the contribution from truckload and what's behind it? Yeah. Well, we've had great volume growth in both LTL and truckload, first of all. And clearly, we have a much bigger base to grow upon on top of in truckload. That being said, you know, I think we started talking about LTL business specifically in the third quarter of last year and, given some data points. And one of the comments that we made, which hold, you know, we stand by and holds true today, is, you know, we're getting what we call synergy loads in LTL. And what we define as a synergy load in LTL is we're servicing a customer on a full truckload, done a nice job, have great relationships. And, you know, often LTL business is, I mean, it's a tough business, first of all, to run. It often can be overlooked inside of a shipper, a little bit of a second or afterthought. And so what we're able to do is we've been able to get, you know, entire books of business from some of our large truckload customers who say, "Hey, we'd like to outsource all of our LTL business to you." And if you think about it, Scott, something as simple as when a customer does that or shipper does that, we in essence do a RFP every day. So if you're a shipper and you have to, you know, you want to go out and bid your LTL business annually every six months, it's a pretty large event. In essence, when we are running that book of business, we can survey the market every day. There's orders that come out and basically do an RFP. I think the other reason that we're able to do that is if you're looking across the spectrum of planning logistics or planning transportation inside a shipper, especially for the medium-sized type customers, you know, they have a transportation department for a make this up, call it a $2 billion shipper, may have one or two people, maybe three people. Well, they need to do ocean. They need to do warehousing. They need to do LTL, truckload, dedicated. And so often, there may not be an expertise to go across all of those modes of transportation. And so LTL is an easy one to say, "Hey, would you do my entire portfolio?" And so we've seen our growth numbers really be driven by books of business, not just low onesie, twosie loads, if you will, which I think is very important to understand the strategic landscape of the business that we're winning. Yeah. And just to echo Jamie's points there, Scott, you know, think about our LTL growth. It's really an offshoot of our truckload business because our customers, we're doing such a good job servicing our customers in truckload that they trust us and they're like, "Figure this out, solve this pain point. LTL, it's a pain point, it's a pinch point for me. Help me solve it. You do such a good job in truckload." So, you know, if we weren't servicing our customers well in truckload, they wouldn't give us that LTL business. So I think our LTL growth speaks volumes about what we're doing in the truckload business. Thanks, guys. Appreciate that. I wanted to, and just for everyone out in the crowd, we have about five minutes left. I want to focus on the complementary services because that doesn't get as much discussion as truck brokerage. So I'd like to touch on each. But first, always been a fan of the last mile business. And you all at RXO recently implemented rate increases given the company's value proposition. Can you discuss how that should develop financially going forward? And maybe before even that, just a little bit of background on what it is that you do in last mile and that value proposition that you offer. Thanks. Yeah, Scott. Last mile, love the business. It really, while there's not as many operational synergies with our other lines of business, the customer side of the business is a lot of synergies. It allows us to have C-suite conversations with all of our top last mile customers because if you think about it, you know, the last mile, we're delivering heavy goods into the home of consumers. And if it goes well, we hear about it. And if it doesn't go well, we hear about it, as does the customer's CEO, CFO, head of operations. And so it's a very high-profile, you know, service provided to the large, you know, the large primarily consumers, but consumer companies. That being said, we were able to get some rate increase over the last year. You know, we feel like, you know, it's important to for a service that's so important and so consumer-oriented, it is important that the value and the customer service gets reimbursed appropriately. And we feel like that, you know, we were able to get, you know, some rate increase to reflect the value proposition that we're providing from a service standpoint. So clearly, that helps financially. We've also got a number of initiatives, in process right now, both, you know, cost as well as customer, you know, new customer initiatives. We are seeing opportunities come our way in current customers. We're seeing opportunities come our way for top-line growth and new customers who really like our service. We're seeing a number of a nice benefit, emerging from cost initiatives we have. We have an initiative with carrier, you know, how we, you know, reimburse carriers or, you know, our independent contractors that we're seeing pay dividends both in terms of quality of service, alignment with, you know, objectives, but also, you know, better price, better cost. And so all in all, if you look at all the initiatives we have across last mile, we do see opportunities for continued increase from an EBITDA, you know, year-over-year, you know, perspective. Then, Scott, that business too, while to Jamie's point, it is different than our full truckload business, but there are some similarities. It's a business that's very, very fragmented. It's really dominated by regional mom-and-pop operators. And we're the largest provider of heavy goods last mile. So, you know, we've been able to scale that business, and which makes it attractive to a lot of our larger national accounts because of that scale. Otherwise, you're cobbling, you know, a bunch of regional operators together, which is like truckload, like the truckload business, you know, that's primarily the majority of that capacity is small mom-and-pop operators. Scott, I'll give you a quick anecdote. Just last week, I received a copy of an email from a large customer. We do quite a bit of business in our last mile business with this customer. We do, you know, a medium amount, let's call it, in the truckload. We do a few services and some of our other complementary services. But the email, it was, you know, really came from a customer laid out spend that this customer has with us and all these different services, and their spend was fragmented. And the point from the customer was, "Hey, you know, as we've been evaluating our spend across all modes of transportation, we see you as an opportunity to further our strategic relationship and our strategic partnership. Take a look at what you believe, based on what you, you know, some data they gave us, what you believe we could do to foster our partnership and expand the book of business across all modes of transportation." And that gets back to that synergy that the last mile relationship has across shippers, you know, on a potential standpoint. And, you know, can't rate the probability of success, but it was great that the customer came knocking to say, "Hey, take a look at this on a much broader basis." Good example of what last mile can bring to the table from a synergy of customer standpoint. Great. Thanks, guys. I want to, we're running out on time, and I did get a question from the audience, and it was a question about truckload and just the trends that you've seen recently. Are you still taking market share because your truckload relative to industry had been very pronounced, but now it seems LTL is more taking that mantle and truckload is fading a bit? So that's the essence of the question. Are you still in a position of taking share in truckload? How do you see that trending? We're absolutely still taking market share. We're, you know, doing it with profit, very, you know, very profitable, you know, growth. Even though our less than truckload year-over-year growth is higher, we're working on a smaller base, of course. But, you know, we still have, you know, by far the best metrics in the industry in terms of truckload year-over-year growth. And, you know, we got tougher comps coming up for sure, but we're still confident we're going to continue to grow that volume and take share. Thanks, Jamie. I appreciate that. Maybe we're pretty much wound out of time. Maybe, I don't think we can fit it in. I was going to ask just on the remaining two complementary services business, but I think we're out of time. Just, guys, thanks very much. If you want to throw in a parting shot or two on those, happy to hear it. But, we have to wrap here and say 20, 30 seconds. Yeah. So I'll conclude, Scott. First of all, thanks for having us. You know, in the midst of a prolonged downcycle, we're positioning ourselves and the company from the top line in partnership with the customers from our cost structure initiatives to optimize our costs so that when the market does inflect, we are positioned to have a significant amount of growth, from both a volume standpoint as well as a, you know, profitability standpoint. We got significant flow through to the EBITDA line from gross margin. And, you know, we feel like we're doing the right things in a tough rate cycle so that when the market does inflect, we'll be, you know, we'll be one of the big winners. I just want to say thank you, Scott, and that I promise you there will be another cycle. There's always been one since 1980. Thanks. Appreciate that. Both of you. Great job, guys. Appreciate the time and thanks for participating. I'm really, really glad that you were here. Thanks, Scott. Thank you, everyone. Take care, everyone.