Greetings, and welcome to Schneider National, Inc. fourth quarter 2022 earnings conference call. At this time, all participants are on a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Steve Bindas. Thank you. You may begin. Thank you, operator. Good morning, everyone. Joining me on the call today are Mark Rourke, President and Chief Executive Officer, Steve Bruffett, Executive Vice President and Chief Financial Officer, and Jim Filter, Executive Vice President and Group President of Transportation and Logistics. Earlier today, the company issued an earnings press release. This release and an investor presentation are available on the investor relations section of our website at schneider.com. Our call will include remarks about future expectations, forecasts, plans, and prospects for Schneider. These constitute forward-looking statements for the purposes of the safe harbor provisions under applicable federal securities laws. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from current expectations. The company urges investors to review the risks and uncertainties discussed in our SEC filings, including, but not limited to, our most recent annual report on Form 10-K and those risks identified in today's earnings release. Schneider disclaims any duty to update such statements except as required by law. In addition, pursuant to Regulation G, a reconciliation of any non-GAAP financial measures referenced during today's call can be found in our earnings release and investor presentation, which includes reconciliations to the most directly comparable GAAP measures. Now I'd like to turn the call over to our CFO, Steve Bruffett. Thank you, Steve, and thanks to each of you for joining us this morning. I'll provide a financial recap for our fourth quarter and full year results, and then Mark will provide his insights on various aspects of our operations, as well as on market conditions. I'll then offer some additional context for our 2023 guidance before we open up the call for your questions. As Steve Bindas indicated, Jim Filter is with us today on the call, and he will be joining our quarterly earnings calls on an ongoing basis, so we look forward to his participation and perspectives. Also, we have refreshed our investor relations presentation, and it's available for your reference on our website, as we'll mention some of the slides during our comments today. Regarding our quarterly results, the $148 million of adjusted earnings was the second most profitable fourth quarter in our history, behind only the $177 million we earned in the fourth quarter of 2021. Adjusted EPS for the fourth quarter was $0.64 compared to the record high of $0.76 in 4Q 2021. The 2022 fourth quarter included an adjustment for our full year tax rate, mostly related to state income taxes and the associated apportionment that has been slightly modified by the inclusion of MLS in our mileage. The lower effective tax rate bolstered EPS by $0.03 as compared to the 25% rate we'd been using as an estimate for the first three quarters of the year. While fourth quarter adjusted earnings were 16% below those of 2021, full year earnings of $617 million were 16% above 2021. In addition to the favorable financial results of 2022, the path traveled is worth noting. 2022 was a year in which we advanced our strategic objectives of growing dedicated, intermodal, and logistics at a faster rate than the other components of our portfolio. Dedicated revenues within the truckload segment grew 45% over 2021, a result of organic growth in the MLS acquisition. For the year, dedicated revenues were 53% of truckload segment revenues as it compared to 42% in 2021. Intermodal and logistics both posted record revenues and earnings in 2022, and together, they delivered about half of segment earnings. Regarding cash flows, we generated $856 million of cash from operations, which was an all-time high and compares to $566 million in 2021. Net capital expenditures finished 2022 at $462 million, just below our most recent guidance of $475 million. During 2022, we reduced our debt by over $60 million, and our total debt currently stands at $205 million. We paid $56 million in dividends during 2022, which was 12% above 2021 as we steadily increase our returns to shareholders. I'll now hand it over to Mark for his comments. Thank you, Steve. I want to thank our valued and diversified customer community and our 17,000 associates across North America, especially our professional driver community, for their contributions and tireless efforts in support of another record performance year for the company in 2022. We set records in revenue, excluding fuel surcharge, of $5.7 billion, delivered record-adjusted earnings of $617 million. Achieved record free cash flow of $395 million and posted record adjusted EBITDA of $967 million. In my comments, I will provide additional commentary on our fourth quarter results by segment and what that may signal for the new year here in 2023. Specifically, I will highlight the status of our three strategic growth drivers of intermodal, dedicated, and brokerage, including the emerging influence of Power Only. As expected, the fourth quarter was atypical what is normally experienced during the peak holiday shipping season, especially in the regular route network portions of our business in both truckload and intermodal. Domestic intermodal container volume moderated as import activity waned and apart from specific e-commerce-driven channels, high intensity capacity coverage, volume, and service premium project work in truckload was limited. In the month of December, we successfully completed the conversion to our new Western Intermodal rail partner with Union Pacific. Let me start there. The planning and execution work of the conversion teams of both Schneider and Union Pacific exceeded expectations as we collaboratively focused on ensuring a positive customer experience through the conversion. I also want to thank and recognize our experienced professional dray driver associates who made it happen at the rail terminals and on the street. In the end, we did not have as much cost impact as expected as we moved from running two networks in the West to one. A good portion of the setup work of positioning and stacking containers and chassis for the conversion was completed in the third quarter. With less overall seasonal volumes and with rail congestion improving, our intermodal operations enjoyed higher dray productivity levels, less use of third-party dray resources, as well as running less empty repositioning miles than we had anticipated. In the quarter, intermodal year-over-year revenue per order improved 7% with order volume contraction of 6%. This, combined with solid execution in transitioning our Western rail partner, resulted in only a 50 basis point year-over-year contraction in operating ratio to 83.3%, a 740 basis point improvement sequentially from the third quarter. As we look ahead to 2023, we are now uniquely positioned with our intermodal model of company-owned containers and chassis and company driver dray, partnering with the Union Pacific in the West and the CSX in the East. With more origin destination pairs and more frequent daily departure schedules in the West and CSX highly reliable execution model in the East, we are very well-situated to take advantage of opportunities for growth, including over-the-road conversion. That being said, in the near term, we expect intermodal volumes in the first quarter to be pressured until Asia import activities ramp back up. We are in the early stages of the 2023 contract renewal process. We are monitoring several customer decision threads. For instance, how are they shaping their import location strategies between the Eastern and Western ports? Are those who pushed more volume through the Eastern ports in the last 18 months considering going back to the West as fluidity has improved? What is the differential between intermodal pricing and over-the-road alternatives? As well as what is customer strategies to take advantage of the favorable emission reduction opportunities that intermodal uniquely offers. For the latter, we intend to offer additional value throughout the year as we ramp up our sizable battery electric dray presence in Southern California for customers looking for the greenest solutions available. We are intently focused on intermodal asset productivity to take advantage of the investments our rail partners have made in service recovery and the investments we've made in container count growth in 21 and 22. As such, we do not anticipate adding to our container count this year. Let's move on to the truckload segment. Our dedicated tractor count grew 33% year-over-year through a combination of organic and acquisitive growth. Truck count was down slightly from the third quarter as new business startups were limited and contractual flex units were less prominent in certain customer applications as we matched resources with individual customer demand levels. Dedicated revenue per truck per week improved 2% sequentially as annual pricing adjustments are being implemented. We expect positive price appreciation in Dedicated in 2023 as first half renewals reflect the inflationary pressure of equipment replacement costs, parts maintenance, and driver wages. We finished the year with dedicated tractors making up 57% of the truckload fleet. Our strategy is to continue to grow dedicated truck counts due to the long-term nature of the contractual relationship and the deeper integration level with the customer, which leads to a higher percentage rate of contract renewals. Furthermore, importantly, professional drivers increasingly prefer the predictable nature of the work and proximity to the customer relationships that Dedicated provides. As we enter the new year, our Dedicated sales team has closed on several hundred units of new Dedicated business awards that will begin implementation later in the first quarter and ramp throughout the year. Our network tractors finished the year at 43% of truckload fleet, essentially flat sequentially from the third quarter. Revenue per truck per week was down low double-digit% year-over-year, with 2/3 of that being price comparison driven primarily to the lack of premium project work and lower seasonal spot rates. The remaining third was productivity driven due to the moderating demand condition and the disruptive nature of the winter weather front that we experienced across a large swath of the nation during the week leading up to Christmas. Our 2023 plans in truckload will be focused on organic growth in Dedicated. We are also actively pursuing and screening acquisitive opportunities in Specialty and Dedicated truck, and are positioned well to move on the right opportunities this year. Our logistics operating ratio dipped only 36 basis points sequentially from the third quarter of this year as third-party support for port drayage, transloading, and promotional support work in brokerage moderated in the fourth quarter. Despite the limited seasonal project and promotional opportunities, order volumes in brokerage proved highly resilient, down just 5% over last year's fourth quarter. We would attribute the resiliency in order volumes to a few things. It is our direct demand creation capability in brokerage, a function that is complementary to our truckload offering but not dependent upon it. Secondly, our contract percentage in brokerage is 60%, and our investments in our digital FreightPower connections for shippers and carriers continues to increase our market nimbleness in both the capture of demand and capacity while lowering our acquisition costs on both the buy and sell side of the equation. Thirdly, we have spent the year improving our collaboration technology and processes between our Power Only third-party carrier offering and our asset-based network truckload service. We have improved from the customer lens, our revenue management, order acquisition, and trailer management execution model. It fits our strategic imperative to offer a broader, committed contract solution to our customers to address their regular route coverage needs. As a result, over time, we see our network business evolving to a more trailer-centric versus truck-centric service offering. With that, I'll turn it back to Steve to provide an update on our 2023 guidance. Great, Mark. Thanks. Moving now to our forward-looking comments. You can find the summary of our 2023 guidance on slide 26 of our investor presentation. As has been well documented, 2023 has started off in a softer economic and freight environment than we experienced a year ago. At the same time, we expect that the broader macro forces of supply chains and inventories will further rationalize in the early months of the year as our customers have been diligently working to address these issues for several quarters already. We expect steady improvement in freight conditions as we progress through the year. Importantly, we expect our earnings to demonstrate resiliency given the progress we have made over the past several years with the composition and performance of our multimodal platform. Speaking of our platform, I wanted to touch on the long-term margin targets, target ranges that we have for our three segments, given that this is the time of year when we review these targets and provide any updates. For the truckload segment, that range remains at 12%-16%. For the intermodal segment, that range continues at 10%-14%. For the logistics segment, we are raising the long-term target margin ranges by 100 basis points, and that'll be to 5%-7%. This range has been at 4%-6% for the past several years. With the momentum of our brokerage business coupled with our rapidly growing Power Only offering, it makes sense to raise the parameters for this rapidly growing piece of our business. You can find these target margin ranges on slides 23 through 25 of the IR deck. Moving now to equipment gains for 2023. We currently expect these to be in the vicinity of $27 million that we realized in 2022. Our 2022 adjusted EPS of $2.64 included $0.06 of net equity gains, while our 2023 guidance currently assumes none. As we incur equity gains or losses, we'll incorporate them into our guidance as we progress through the year. Regarding our effective tax rate, we expect it to be approximately 24.5% for the full year of 2023. That brings us to our 2023 guidance range for adjusted EPS of $2.15-$2.35. Our guidance for net CapEx is a range of $525 million-$575 million, Our capital plan includes meaningful investments in trailing equipment in support of growth in our dedicated power-only and intermodal offerings. The plan also enhances our tractor age of fleet that has trailed our targets for the past couple of years due to OEM production constraints. Continuing with the theme of cash flows, we've announced a share repurchase authorization of $150 million, the primary purpose of this repurchase program is to offset the dilutive effect of equity grants to employees over time. The program will serve as a complementary component of our overall capital allocation framework. Finally, we recently announced an increase in our quarterly dividend to $0.09 per quarter, a 12.5% increase from the $0.08 per quarter in 2022. That's also an 80% increase from our IPO five years ago. Capital allocation, return on capital, and shareholder returns remain at the forefront of our financial priorities in the year ahead. We'll now open up the call for your questions. Thank you. At this time, we'll be conducting a question-and-answer session. If you'd like to ask a question, please press star one on your telephone keypad. We ask that you please limit to one question and one follow-up. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Our first question comes from Ravi Shanker with Morgan Stanley. Please proceed with your question. Great. Thank you. Morning, everyone. With the new logistics margin targets and the commentary, kind of that you're focusing on more of a trailer-centric rather than a tractor-centric network, sounds like you guys are going all in on Power Only, which is understandable given the growth in that business the last couple of years. A few questions there. One is, In the downturn, is it now clear that that is a structural growth area of the industry and not something that was driven by, kind of, pandemic supply chain tightness? Second, what is the competitive environment there compared to the rest of brokerage? Maybe third, what's the margin profile for that business like compared to the rest of logistics? Great. Thank you, Ravi. This is Mark. Yeah, we've been at the Power Only game long enough to really understand what we believe is a very resilient model. It was in my opening comments of despite the fourth quarter of 2022 being much different than the fourth quarter of 2021 from a seasonality standpoint, our brokerage volumes inclusive of Power Only only contracted 5%. I think that's a good indication that the durability of that business model. Increasingly, we see it as a very instrumental part of our overall network offering alongside our excellent owner-operator and company driver model within our truckload group. From a customer perspective, that is a very seamless decision point for the customer. What we're ultimately trying to do is offer a broader range of contractual commitments and then use our processes and technology that we continue to invest in to integrate Power Only into that. We would only expect this to be more effective over time for those investments. Certainly we've now seen the benefit of Power Only in conjunction with our network offerings and on the asset side, both in an upmarket and now in a more moderating market. Our enthusiasm and our commitment there remains very, very strong. Great. Maybe as a follow-up, kind of on the intermodal business, you guys did a pretty good fourth quarter, and kind of the guide shaping up pretty nicely as well. You You know, how do we think about what the margins for that business look like in 2023, especially given some of the competitive shifts in the marketplace, kind of do you feel like the business that's moved to the UP kind of is now stable, or do you feel like there's gonna be a little bit of back and forth there on maybe the price and the share shifts? Yeah, Ravi, a good question. You know, as you think about, 2022, in one form or another, we were in a state of transition, throughout the year, whether that be commercially or whether that would be operationally. We're quite pleased, at how well that transition went from a customer view and our ability to execute, and that's a great credit to the Union Pacific and certainly the Schneider team who was, heavily invested in, throughout the year to get to that type of result. If you kind of put the whole year in context, we came within our 10%-14% range, which we reiterated earlier on our call this morning, at about 13%. As, you know, we move forward, we're pleased that we have some of the distraction, if you will, and we're operating in much clearer air all across the board as we head into 2023. You know, obviously, we want to see some import activity return. We want to see some of the other value that we think the customers are going to get, particularly around emissions and what we believe is a very rich pool of over-the-road conversion. Those are the things that we'll be focused on in 2023, and we feel that we'll be well positioned within our margin range that we've stated going forward. Very helpful. Thank you. Our next question comes from Ken Hoexter with Bank of America. Please proceed with your question. Hey, good morning. That's a new one. It's Ken Hoexter from Bank of America. Who's it again? Just following up on intermodal. Can we talk a little bit conceptually about revenue per load? You know, given the softer market and the transition out West, you're now competing with Knight-Swift on that same network. You know, does that, you know, do we see more pricing competition given they're more moving on UP and the new e-environment or, you know, as fuel comes off? Maybe just talk about the pricing environment and how that's going to impact, I guess, ultimately that margin question as well. Ken, this is Jim Filter. Really right now, when I think about the competition for our intermodal services, by far the largest competition is from over-the-road, and that's the focus to be able to continue to grow that service offering. We've seen over the last few years that intermodal has lost share to over-the-road, and opportunity to be able to grow there is by providing overall value. Some of that is based on service, ability to provide more value there that's competitive with truck, and we've certainly seen an improvement in our rail partners that we're working with, especially over the last couple months here on the Western network. We think we have a great opportunity to be able to sustain that value. Can you talk in terms of metrics, though, perhaps? You know, I don't know, maybe box turns or something that helps us understand the efficiency shift with the new network or to- Yeah. On box turns, obviously, we have a huge opportunity to improve box turns. There's an opportunity. We've been below this, our expected level of box turns over the last couple of years, not from a matter of necessarily performance, but just overall demand. There's an opportunity to get back up to the 1.7 to 1.8 turns that we were operating at previously. The both of the rail networks are operating efficiently as well as the way that they're operating with our drivers. Our ability to cycle in and out of the ramps has improved dramatically over the last 18 months. Great. Thanks, Jim. You're welcome. Our next question comes from Jon Chappell with Evercore. Please proceed with your question. Thank you. Good morning. Morning. Mark, you'd mentioned how the dedicated pricing environment was holding in pretty well. I think you even said, plan to be up this year based on an early bid season. What's customers' willingness to kind of fully absorb some of these elevated inflationary costs? You know, given your service and your growth in that business, are you able to get kind of inflation plus pricing, or are you just kinda trying to hold on to cover the cost inflation, in Dedicated only? One of the benefits. Good question, Jon. One of the benefits of Dedicated is we have less variability in that business, both from a demand standpoint and our overall cost structure, much more steady than sometimes we experience in the irregular route network side. Because that's where the drivers want to participate in, we just have a better predictability there. That being said, it's not immune to the inflationary pressures that have taken place in the industry from wages, maintenance costs, parts, equipment replacement, et cetera. We have mechanisms in working with our customers there. We're deeply integrated. We provide great value, we have confidence, we have seen confidence in our renewals in the second half of the year to recognize those inflationary pressures. We're confident that we'll be able to, based upon how we're structured there, to achieve that as we come to the new year here. I think that's probably more of a first half renewals, as we had our second half renewals, those were taken into account fairly effectively, so that's why we still think overall we'll still have some price appreciation in Dedicated for full year, 2023. Okay. Great. Just to follow up on the truck side, you have to go back a long way to see a sequential decrease in the Dedicated truck count. That was probably, I'm guessing, just some pruning of equipment. I don't know if there was some seasonality involved too. Network moved up sequentially. Again, small numbers, but kind of against the run of play, so to speak. As we think about the fleet growth this year, I mean, I guess there's two parts to this. One, is it primarily still in the Dedicated segment, as you continue to gain share there? Two, as the OEMs kind of eased a bit, what's the total kind of overall growth to your fleet that you're expecting in 2023? Yeah, Jon. Strategically, our growth focus on the truck side of the business is in Dedicated. As mentioned earlier, we have sold several hundred units of new business that we'll start to implement here in the late first quarter and through the second quarter. That will be our growth focus. As we've mentioned, we want to make sure that the best we can is we want to stay stable on the network side and provide additional coverage and value by integrating our Power Only offering in with our network asset side. Our growth on the network side, while it's reported in Logistics, will be more focused around Power Only than truck count on the asset side in our network business. Got it. Thanks, Mark. Our next question is from Scott Group with Wolfe Research. Please proceed with your question. Hey, thanks. Morning, guys. Good morning, Scott. Steve, any color, Steve, any color on the margins for the segments in 2023? I know we got the long-term margin targets. I'm just curious if 2023 looks any differently for any of the businesses. Yeah. I guess, providing those ranges is our attempt to provide some insight in how we view the business over the longer term, and it can vary year by year of where we fall within those ranges. It's part of the benefit of having the complementary portfolio of services that we do have. In any given year, one might be toward the upper end, one might be in the middle, and the other might be lower, wherever it might end up. It all contributes to the enterprise profitability over the course of time. On a full year basis, it's hard to nail down a specific number, and it's probably not a path that we'll go down on a frequent basis. I feel very comfortable with the range of margins that we have outlined, as we look at 2023 here early in the year. Okay. Maybe just to follow up, like, the one intermodal, right, 91 OR in Q3, 83 in Q4. That's the one that's moving around the most, maybe the one we need the most help with. Any thoughts on, you know, beginning of the year, where we should be thinking about for intermodal margins? Do you think those improve or not? Any color? Yeah. Sure, Scott. you know, as we look at 2022, we look at that on a full year basis. Obviously, we had a lot of work that we were doing in the transition and working with our rail partners to effectively execute that. I'd have you look at maybe the second half of the year by putting the third quarter and the fourth quarter together, and that too would be on an average almost of that 13%, right? There were different puts and takes based upon when we were staging and preparing for the transition and obviously, coming down through the stretch with a little less volume, we were a bit more efficient in the fourth quarter than we anticipated. Overall, I think that full year look and that full year 13% within our 10%-14% range is, I think, is very appropriate to assess 2022 in. As we enter here 2023, we feel the same relative to that positioning. I'd add to that, Scott, that we look through a lens of growing earnings dollars, providing a steady growth story to go with our organization here. There's a balance between volume and margin that we're conscious of, and that can as we adjust those dials, it can vary a bit by segment and by service offering as to what we've got going on in there. I'd anticipate some of that to continue. The point I'm trying to make is we emphasize growth in earnings dollars and aren't necessarily trying to always be at the high end of a margin range or whatever, depending on what type of profitable opportunities we see ahead of us. Okay. Thank you, guys. Our next question is from Bert Subin with Stifel. Please proceed with your question. Hey, good morning, and, thank you for the questions. Good morning, Bert. I guess this is probably for you, Mark. You were able to stay above the $400 billion mark in logistics during Q4, which, you know, you guys mentioned the clear rate and volume headwinds. Where does that segment go from here? I'm not really talking about 2023, but more maybe 2030. You talked about intermodal doubling in size by 2030. Do you see a similar setup for the logistics segment? If you do you think that becomes more a function of, you know, an increased footprint in the digital side, or is it really more on the Power Only side? Yeah, Bert. As it relates to the logistics side of the business, you know, we really place logistics, intermodal, and dedicated as our strategic growth drivers. On the logistics side, less capital intensive, so getting a bit more capital intensive with the Power Only offering. Our strategic approach to that is why we have a complimentary commercial collaboration with our asset side of the business. I think that's one of the real benefits of a brokerage business tied to assets is your ability to collaborate. Power Only is a perfect example of that, between assets and third parties. But we also have heavily invested in not only the ability to generate our own freight demand within logistics so they can chart their own course and be accountable for their own success while collaborating, but not dependent upon our assets. The digital investments we've made in FreightPower for shippers and FreightPower for carriers in ways that we can scale that business and aggregate capacity on one hand, aggregate demand on the other, particularly around that long tail, small carrier, small shipper. The digital footprint allows us to do that economically feasibly and grow our business without growing our people count at nearly the same rate. We will continue to invest in those elements, and we're seeing great benefit by on the efficiency factor with Power Only coming upon our FreightPower for carriers and FreightPower for shippers execution. Really, we don't see that being limited for growth. It's our ability to go out and add value, and we'll continue to invest to the degree necessary to achieve that. Very bullish, and we think we're more resilient through cycles because of this asset-based brokerage alignment that we have that I think offers advantages over perhaps others with slightly different models. Maybe just to clarify there, do you think it's more of a margin than a revenue growth story? I know you've talked more about the net revenue side there, but you know, clearly the two go hand in hand when you think about operating income. I'm just curious, like, based on your answer there, if you think there's just more efficiency to be, you know, be had in the market just, you know, by increased automation, or if you think it's a combination of that and, you know, expanding the market that in which you play. Yeah, we think we have opportunity to improve margin with the efficiencies of the technology and being more digital. There's no question. We probably are focused more on earnings dollar growth here than margin because of the more asset light nature that logistics has. We want to make sure we're growing and growing earnings. That is really the focus of the logistics group. The change in the range that we've made is to recognize if we're going to bring assets to bear in some way, shape, or form, like a trailer and Power Only, we have to get a good return on that additional investment that we're making on the assets and which is what's behind our range expansion from four-six to five-seven. Yeah, we're leaning on top line growth, margin improvement, and getting a return on the investments that we're making there. We got a really good group and the results of what we've seen in this business really track over the last three years is really, and from our view at least, impressive. Got it. Just a quick follow-up. You know, you provided the, your initial look at 2023, you know, guidance range of $2.15-$2.35. Can you give us some more detail on how you developed that guidance? Really the reason I ask is, I'm just curious if you made assumptions that, you know, the first quarter is the trough and then ultimately we see sort of incremental improvement through the year, or do you assume that, you know, there's a big step up in the second half? It's just clearly an, you know, uncertain backdrop. I'm just curious how you were able to back into the numbers just for some more detail. Thank you. What is that? Three questions, Bert? There's a clarification in there. Oh, okay. This is Steve, and I'll take a crack at that one. I think it probably is... We don't necessarily... When we were sitting here a year ago, we felt pretty strongly about a first half, second half narrative of 2022. We felt like the first half of the year would remain quite robust and then soften a bit in the second half, and it kind of played out that way. In that year, as we sit here at this point in the year, I don't know if it's exactly a first half, second half narrative, but I think it's, like I articulated in the prepared comments earlier, more of a steady improvement as we go through the year. I do think first quarter of 2023 could be the softest point, and then we see some traction steadily gaining as we move throughout the year. That could, by definition, play out to be a stronger second half than the first, but I don't know that it'll neatly fit within the months, quite like that. I think we'll be seeing some improvement before the second half. Thanks, Steve. Thanks, Mark. Thank you Bert. Our next question is from Jack Atkins with Stephens. Please proceed with your question. Okay, great. Good morning, and thanks for taking my questions. Morning, Jack. Mark, I guess maybe a question for you. I mean, I'm looking at the stock. It's trading at a couple turn discount to your larger truckload peers. You know, pretty substantial discount to, you know, some of your intermodal peers. You know, when you think about capital allocation, you guys announced a $150 million buyback, but it's principally related to sort of offsetting dilution. My understanding is, like, you know, there's just some challenges buying back stock more aggressively because of the dual share class structure. I guess as you kind of think about things moving forward, you know, why does a dual share class make sense here? Do you feel like it's doing your B class shareholders justice? And I guess, is the board considering some changes? Well, Jack, there's a lot there that I'm probably not at liberty to discuss. Yeah talk about. I don't have any changes to predict or really even bring color to as it relates to that. What we are focused on, as it relates to your opening comments on the discount, I think, we're gonna continue to focus on this multimodal platform that has different capital intensities based upon our truck, intermodal, and logistics business and keep looking for ways organically to invest in those strategic growth drivers that we keep hitting upon. Also prepare ourselves and be very active in looking for acquisitive opportunities from our capital allocation priorities that can help advance those three strategic growth drivers of dedicated, intermodal, and logistics. Those are the things that we're focused on. We would like with our, with our share buyback, you know, it's just from a capital allocation approach there, is we'd like to get to a fixed amount of shares so that we can be more predictable what our share count is and not add to it with incentive incentive grants. We think that $150 million authority over the next three years will allow us to achieve that portion of our capital allocation strategy. Our real primary focus is on the organic investment and potentially where we can find the acquisitive opportunities that help us advance like we did this past year with MLS, a raging success from our view. It got from both a dedicated growth and a dedicated effectiveness standpoint. We would like to look at those options as well. No, that makes sense. I guess my point is you guys are just doing an outstanding job, really across the business, and I just don't know if the stock's getting a lot of credit for it. I guess maybe for my second question, you know, I would love to kind of get your thoughts on sort of the increasing strategic value that trailer pools are providing. We've touched on it a lot, but, you know, as you guys are going through, you know, bid season here, in 2023, you know, to what degree, you know, having such a large trailer pool, the ability to deploy trailer pools to customers, is that helping you navigate through this bid season maybe better than folks would have anticipated if you go back a year or so ago? Just kind of curious how that's impacting rate negotiations, if at all. Jack, this is Jim. The real opportunity here is also for our customers because with this large trailer pool and being able to integrate both the asset base, where we're using a company driver and using third party, being seamless to our customers, gives us some flexibility that you don't have if we're just limited to one or the other. That's providing additional value for our customers and additional value for our enterprise. Okay, thank you. Jack, you know, as we get into the allocation season, obviously we're looking for where those may complement each other or where we can add and take a broader share and do so in a way that's easy for the customer to say yes to us and obviously easy for us to say yes to that increased share. We're really pleased with the flexibility, the integration, and the collaboration on those networks that trailing asset allows us to share back and forth and be effective in doing that. Thanks again for the time. Our next question is from Christian Wetherbee with Citi. Please proceed with your question. Hey, thanks. Good morning, guys. Good morning. Wanted to touch on intermodal again, if I could. You know, maybe to ask sort of the margin question a little bit differently. Obviously, you're not updating the long-term forecast, but there's a major shift, obviously, changing the carriers, the providers that you're using. Kind of curious, do you feel like there's any uptick that you might get or any increased dynamic you know, aspects of the pricing arrangement that you have with the new railroad out west that could influence how margins play out, particularly in 2023 when obviously there's going to be pressure on truckload rates? Yeah. You know, our deals with all of our railroads are long-term deals. They're market competitive and there's some adjustments in the structure that we work with that, you know, we just don't get into details about how those necessarily work. We believe that this is gonna put us in a very competitive position when we look at how we're operating, and it doesn't matter if we're talking about competing with truck or with the competitors that are on the rail. We bring some differentiation on the UP. The fact that we are bringing the largest company dray fleet using our own chassis. We'll be the only one that has a large chassis fleet using all of our own chassis. Our company drivers are able to be more productive. We feel like we compete well in all directions on this new rail partnership, as well as the just tighter integration between the UP and the CSX having more steel wheels and expect that as we grow this network, we'll be able to expand that and create even more seamless options for our customers. Okay. That's helpful. I appreciate that. Then Mark, maybe a bigger picture question. Just when you think about sort of the M&A landscape or anything else you want to do, obviously, you've had some success there. Kind of curious if you think there's going to be incremental opportunities in 2023 as we see a little bit of this transition period going on, or is it something that maybe takes a bit of a breather for a time? Just kind of curious what your sense is and where maybe those opportunities could be. Of course, Chris. I think we're certainly active and feel that we're positioned if the right one that we can get to where we want it to be can be done in calendar year 2023. We don't have anything obviously to announce at this point, but that's our mindset, is continue to look for those opportunities both proactively and prospectively so that we can continue to advance those strategic initiatives and the success and the approach that we've taken with our most recent two that we've had in the last, I guess it's 13 months now, suggesting gives us confidence that we're on the right path there. Yeah, I would love for that to be something that's steady and periodic. I just don't have anything to announce just yet. Just anything from a vertical standpoint where it might fit in the portfolio where you think you have needs in the portfolio? As it relates to, something we don't have today or expanding services is the question? Yeah. Just is there a part of the business that you would be maybe more focused on than others? Yeah. I think while logistics is a growth segment for us, we think we have such robust organic growth opportunities there for the investments that we're making in our digital footprint, the Power Only offering, and our own ability. It would have to be something, I think, really special there for perhaps that to be the primary focus. We wouldn't eliminate it, but I think it would have to be really special. Intermodal poses a little bit more concentration and a few less options to consider there. That leaves the most probably attractive target for us would be in that specialty truck or dedicated truck arena. That's the one that's probably has our attention the most. Within that, you can find yourself at times expanding into new markets that you don't presently serve or don't have a large overlap of customers, which is the additional benefit of that. I wouldn't rule out logistics. I'd put a really remote on intermodal and a much more target-rich environment perhaps in the dedicated and specialty truck area. Okay. That's really helpful. I appreciate it. Thank you. Our next question comes from Ariel Rosa with Credit Suisse. Please proceed with your question. Great. Good morning, thanks for all the color. Particularly on the intermodal piece, I wanted to stay on that. Maybe you could talk about the long-term target to double that business by 2030. Maybe you could kind of go into some of the details of how you think that doubling would proceed in terms of whether it's taking share or overall growth for the intermodal industry. Kind of what's the progression to get to that target? Thanks. Thank you. It's really based on both of those factors. First, the largest opportunity is clearly over-the-road conversion. We've seen this swing towards more over the road than intermodal over the last couple of years. Believe as, you know, the country has set an objective to remove carbon emissions by 50% by 2030. The fastest way to do that is by converting to intermodal. Expect as we get closer and closer to 2030 that there's more customers that are gonna be feeling the pressure to reduce their Scope 3 emissions, and we're gonna be there and available with the capacity to help them do that. Certainly we feel really good about our position relative to our other intermodal competitors, whether they're asset-based or non-asset-based. We don't feel that, you know, converting from over the road that we would see a slip back, that it's being won by one of our competitors. Got it. Okay, very helpful. Then just, for my second question, I wanted to ask about the potential for efficiency gains, particularly on the truckload side. I think during COVID, when supply chains got really tight, obviously we saw some inefficiencies kind of creep into, not just for you guys, but for many carriers, whether it was higher deadhead miles, higher unseated tractor counts. To what extent do you think that can kind of reverse in 2023? To what extent has that already been in the process of reversing? Maybe you could just touch on that. It would be appreciated. Yeah. I mean, we think asset productivity and people productivity is our largest self-help item as we quote-unquote, "Return to something more normal." We are seeing improvement of the efficiency factor and how quickly boxes are turning. We're not back to pre-pandemic levels. We have an intermodal, where Jim mentioned earlier. We are seeing improvement and less friction in the supply chain, and we need to take advantage of that. While we still expect some allocation constraints with our OEM providers, those are improving slightly, and we want to get the more efficient equipment to higher, excuse me, lower cost per mile. Maintenance that's associated with it keep getting some catch-up in our age of fleet. Whether it's our tractor, whether it's a trailer, whether it's a container, we believe, we have some light at the end of the tunnel here that we would expect to start to see some reversal of some of the erosion we've had because of all the supply chain and the friction issues that we've experienced to include, the nice progress our rail partners are making relative to crews and the investments. The UP has done a terrific job on some of the technology advancements that they've made to make us more efficient with our dray fleet in and out of rail terminals. If we can make them more efficient and make ourselves, we all win in that environment. Our alignments are very closely aligned, and I am really pleased and impressed with the commitment that the UP has made and we're seeing the benefits of that very, very early in our relationship here. That's where we're focusing the entire organization on how do we arrest some of this inflationary impact, and asset productivity is our best remedy. Is there any way to quantify the magnitude of that benefit? Maybe if you could give us like a data point or two in terms of what some of those efficiency metrics might have looked like and to what extent they can improve in 2023? Yeah. There's a host of those there. I mean, certainly, we look for billed miles per tractor per day. We look at contribution across those assets per day. We look at net revenue per order differences in our brokerage business. We have a series of metrics that really focus our associate base who can impact those metrics to include our professional driver community and how that benefits the entire enterprise to include themselves. We have great visibility to those, and those are distributed and embedded in everything that we do in our operational approach to the business. Got it. Okay, wonderful. Thanks for the time. Our next question comes from Tom Wadewitz with UBS. Please proceed with your question. Yeah, good morning. Mark or Jim, I wanted to ask you about your thoughts on the competitive dynamic in intermodal. I know you've had a few kind of questions broadly along those lines. You know, it does seem like the backdrop is weak in the near term, just given the imports being down. You know, I think that the competitors, you know, you want to grow, other big players want to grow. How do you think that the kind of bigger intermodals names will play it? Do you think that there is a risk of, you know, everybody focuses on volume, you all have flexibility with the rail partners, and you kind of push price down? Do you think there'll be, you know, maybe, ability to accept weaker volumes for a per iod and just kind of, focus more on preserving price? I mean, I guess it's, you know, it's a couple big players and the competitive behavior does matter. Yeah, Tom. Well, we certainly already felt the competitive dynamic here in terms of demand in the fourth quarter with the extreme decline in imports into the West Coast. I believe we're already experiencing that type of situation. You've seen that, you know, you look at our revenue per order, up 7.5% year-over-year, up sequentially despite the weakening demand. I don't believe that we're seeing a situation where everybody's going and, you know, needing to move every single container. A little bit different than over the road where you have a driver and you need to get that driver moving. You have the ability to take capacity out of the marketplace and just by stacking containers and it appears that across the industry there's been some of that. I think, Tom, as you look at our 2023 approach here, we don't anticipate at this juncture of adding container count. We've done a good job in 2021 and 2022 of building our containers, and we're really focused on the asset throughput in conjunction with our rail partners and looking to focus on asset productivity yields and being a really good alternative to over the road. That's why it's so important that we serve it well and the connection between the UP and the CSX and the efficiency factor, all of that matters because that allows us to put a very truck-like experience, particularly with all the investments that they have made to improve fluidity. That's what we're focused on, and, we won't be adding a container count this year. Okay. Yeah, that's helpful. You think that, even as you go through the contract season, I, you know, I wouldn't expect the rate pressure to show up in four Q because you don't have new contracts coming in, right? Even as you look at the bid season and contracts, you think that you'll have a pretty good amount of discipline. Do you think that that results in maybe, you know, intermodal contract rates being down a lot less than truck? Then I guess just one more element to that, and I'll pass it along. What about the how mindful should we be of storage revenues as the sort of revenues rolling off? Is that a real headwind in intermodal or is that something that, you know, it's not really that big a deal? Thank you. Yeah, I don't think storage revenue is that big of a deal because that's not something that you make money on. You'd rather have your assets out there generating additional earnings rather than the cost to stack and store or hold onto that equipment. Whether it's there or not doesn't necessarily have an impact on earnings. Tom, as we get through this allocation season here, you know, as I mentioned in my opening comments, we're looking for several customer threads. How are they thinking about the locations of the import decisions that they make between the East and the West? There has been some shift to the East as there's been concerns about fluidity and as that's now improved and returned, how are they thinking about that, you know, this year and going forward? Obviously, the emission reduction piece is a very powerful trend in the favor of intermodal, and there's different customers at different locations along that spectrum of where that's important. Obviously, we have to then see the differential between the value proposition between pricing between over-the-road and intermodal to include the dynamic of fuel and how that impacts those decisions. There's a lot that kind of goes into that customer. We certainly try to show where value can be derived through those combinations. The beauty that we have is that we don't really care if it's over-the-road or intermodal. We have options on both of that, so we're agnostic. We're really trying to put the best solution in front of the customer that meets what they're trying to accomplish. Okay, great. Thank you. Our next question is from Brian Ossenbeck with J.P. Morgan. Please proceed with your question. Hey, good morning. Thanks for the time. Sorry, Brian. Maybe on that last part, Mark, you know, what's the visibility you have to taking share back from the highway? You know, that's obviously a big focal point of the industry, and you've talked about it several times today. Spreads, savings spreads are probably coming down. You mentioned some of the factors that are going to affect that, but demand's probably weaker in the near term. Do you have visibility to that coming back in? Is it a little too early with bid season? You know, what's the level of confidence and I guess connection you have to sort of plan for that coming back, and how much headway do you think you can make this year as service improves and the transition is done? Brian, it is, it looks a bit early, but I would tell you, our customers are enthused about getting back to an intermodal option that they can put into their allocation mix in a more aggressive way, for all the reasons we just talked about, costs, emissions, et cetera. We've all been working in a way to give them more confidence that they can do that with a good service product in the end, and I know our rail partners are intently focused on that as well. You know, we're optimistic as we sit here in, I guess, the first couple of days of February, but it's really early in that process. The dialogue that we've had really throughout last year and, you know, we're always in constant dialogue around what customers are trying to accomplish and how all the services we have fit. We'll have a better feel for that as we get out through the April-May timeframe, Jim. Maybe. Yeah, it does appear that spot rates have really found a floor, and there's some movement around there. At this point, we do see signs that capacity is leaving the market at these levels. The question is if demand returns in the second quarter, that's probably less of a shock than if that occurs in the fourth quarter at the back end of the year, it would be, I would assess that would be a larger shock. As we're talking to customers, that's the dynamic that they're thinking about is, well, at what point does demand start to return? What impact does that have? They've gone through some dramatic shifts over the last couple of years. While they're balancing the opportunity to reduce costs today versus exposing their organization to risk later in the year. That's the dynamic that they're playing. All right. Thank you. Just to follow up on that with the capacity leaving, the market, what are you seeing specifically there? I know, when we first saw some of the owner-operators leaving, I'm sorry, people leaving to go on their own from owner-operators back in, I call it, like, late 2020, I guess, that was the first sign of things getting really tight, assuming some of them are coming back or maybe are still coming back. Is that one of the data points that you are viewing in terms of monitoring capacity? What else are you looking at that and, you know, is it a purge or is it just, you know, continued kind of grind out of some of the excess that might have been built up over the last cycle? Maybe a little bit more of a grind out. There's a variety of different factors that we're using across our organization to get data points to understand what's going on with capacity. It would indicate that there's. you know, more of a grind out exiting the marketplace. Yeah, we're monitoring things of defaults on leasing of units. That looks like through our channel check that that's back to pre-pandemic levels, which was quite muted coming through the pandemic era. Also insurance renewals and the number of units being renewed versus prior. There's a number of signals. Again, these are the public, I think, the government employment stats may be a bit lagged. We're trying to get what's more real-time and looking for some of those other signals. Those channel checks, Brian, I think would suggest that we're seeing an accelerated on that small carrier front on some of those some of those indices. Okay. Mark and Jim, thank you very much. Appreciate it. Welcome. We have reached the end of the question and answer session. I would like to turn the call back to Mark Rourke for closing comments. Great. I appreciate everyone's time and attention today. Let me just close by referring you, if you have an opportunity to go to page 12 of our updated investor presentation. Our strategy is to be disciplined in our deployment of capital to enhance shareholder returns and grow this enterprise. To achieve that, we have outlined our key strategic growth drivers of dedicated intermodal and logistics, and obviously had a chance to talk about that today. While our priority is on organic growth first, we are actively pursuing the right acquisitive opportunities that advance those priorities. We're continuing in this environment to evaluate our whole enterprise for cost saving opportunities and maximize our operational efficiencies to expand our margins. Furthermore, we're committed to the design and implementation of this continued digital transformation in our industry, and we want to dramatically improve the speed and the accuracy of information that we share and the visibility that we have with all our stakeholders across our value chain in both transportation and logistics. Finally, we intend to lean in and advance our social and environmental goals and offer our customers sustainability options, tools, and services to provide value as they reduce their carbon footprint, and we can be a key and trusted partner in doing that. Again, thank you everybody today, and we'll talk to you next quarter. This concludes today's conference. You may disconnect your lines at this time. We thank you for your participation.