Thank you for standing by. My name is Bailey, and I will be your conference operator today. At this time, I would like to welcome everyone to the Schneider 3Q 2023 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. Please limit your question to one initial and one follow-up question. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press star and one. I would now like to turn the call over to Steve Bindas, Director of Investor Relations. Thank you, operator, and good morning, everyone. Joining me on the call today are Mark Rourke, President and Chief Executive Officer, Darrell Campbell, Executive Vice President and Chief Financial Officer, Jim Filter, Executive Vice President and Group President of Transportation and Logistics, and Steve Bruffett, Executive Vice President. 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. All forward-looking statements are made as of the date of this call, and 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 CEO, Mark Rourke. Thank you, Steve, and good morning, everyone, and thank you for joining the Schneider call today. I'm going to start with some broader context on the market before getting to our Q3 results. We are operating in an elongated trough of the current freight cycle. As we've seen for the better part of the year, freight volumes remain muted, and while inventories have normalized, shippers are facing an uncertain macro outlook. Despite pricing that in some cases are below operating costs, carrier capacity has been slow to rationalize. Last quarter, we shared that we were strongly positioned to capitalize on opportunities as they begin to materialize. While we did not see those opportunities in the Q3, recent shutdowns of a few competing brokerage operations reflect the unsustainable nature of current pricing and the expectation of targeted near-term pricing improvements. We believe rates have fully reset during the Q3 and expect pricing to improve in the new year as the market begins to return to equilibrium. With that backdrop, let me provide context for Schneider's Q3 performance. We expected the quarter to be challenging, and it certainly was, as the forceful impacts of pricing resets were realized, especially in our network offerings of truck and intermodal. The earnings impact of this recent pricing activity was compounded by a handful of cost items, and the combined result was a sharp decline in our sequential earnings. At the same time, there is encouraging progress in elements of our portfolio and promising signals emerging in the broader market. It's helpful to provide additional context to both sides of the equation. Regarding the cost items I just mentioned, rather than a typical quarter, which has a mix of favorable and unfavorable items, there were several areas that all fell in the unfavorable category during the Q3. Their cumulative impact contributed to the sequential decline in quarterly earnings. First, we had unfavorable fuel dynamics during the quarter. We typically do not talk about fuel, as over the course of time, fuel has a relatively neutral effect on our earnings. However, it was a notable negative factor in the Q3 of 2023 compared to the prior quarter due to the rapid run-up in fuel costs. Next, we had expenses for bad debt that were much higher than normal, as we typically have insignificant amounts of expense in this area. This quarter, the combination of customer bankruptcies and uncollectible receivables resulted in meaningful expenses. In fact, more expense in the quarter than we typically experience in a full year. Also, equipment gains were lower on a sequential basis due to the softening of the used equipment market. In aggregate, these costs represented a headwind of $18 million compared to the Q2. These items are all in part of the sauce, yet they are outside of the core elements of our business results, such as price, volume, and productivity. So let's transition to those topics. Volumes in our truck network business have been steady but unseasonably tepid. We improved asset utilization, but that benefit was far outpaced by the reset contractual pricing, which was most acute in this part of the business. That impact was compounded by low double-digit percentage of loads coming from the depressed spot market. In addition, the majority of cost items we called out in the Q3 resided within the truck network. The combination of these factors resulted in a pronounced sequential decline in margins and generated a margin profile in this portion of our business that is not sustainable. We have been proactively addressing our operating costs since the Q4 of 2022, and have implemented significant cost reduction initiatives that have enabled the maintenance of our variable contribution margins on a year-over-year basis. Yet a growing portion of the network book is not at compensable rates, and therefore unsustainable due to the remaining inflationary cost impacts of wages and equipment replenishment. We are diligently pursuing targeted price recovery and are prepared to pivot to more compensable freight when the market supply and demand condition rationalizes further. On a brighter note, our dedicated business continues to grow and deliver expected results. We absorbed meaningful new business startup activity in the quarter, and excluding a customer bankruptcy impact, we're still able to deliver stable sequential margins. The combination of organic growth and the addition of Midwest Logistics Systems, and now M&M Transport, has us exiting the Q3 of 2023 with 6,680 tractors operating in a dedicated contract configuration. We have a line of sight to a series of new business startups in the Q4 of 2023 and the Q1 of 2024, giving us confidence that our momentum and dedicated will continue. We are growing our dedicated service offering as we enjoy deeper, more enduring relationships with customers, and we leverage our ability to deliver unique solutions that address how our customers deploy their supply chain strategy to deliver differentiation in serving their end markets. Also, our professional drivers feel, participate in, and enjoy the experience those deeper relationships deliver at the local level. Turning to the intermodal segment, we saw modest tender volume improvement throughout the quarter as we work to improve the balance into critical import markets, such as Southern California and Mexico, to lessen the financial impact of empty container repositioning. The work of improving network balance is ongoing, even as we see a more pronounced lift in tender volumes in the month of October. Revenue per order was down 4% sequentially and 16% year-over-year, through a combination of price contraction and a mix change with a higher percentage of shorter-haul regional volumes in both the eastern and western portions of the network. Despite not having the benefit of a meaningful customer allocation season, we have already grown our order count by 20% on the CPKC service into and out of Mexico since its implementation. Overall, we continue to believe there is a large opportunity to convert over-the-road freight to intermodal across the entire North American network. Encouragingly, discussions with several of our largest customer relationships in the consumer products, retail, and automotive verticals indicate that over-the-road conversion is aligned with their 2024 transportation allocation objectives. We have at least 30% of pent-up growth opportunity in intermodal container and chassis asset productivity. Finally, in the logistics segment, brokerage volumes and contribution margins are under pressure from intense competition. While challenged, our contract logistics and brokerage business remains soundly profitable as we nimbly adapt to the current market realities while continuing to invest in our FreightPower for shipper and carrier platform, as well as in growing our power-only capabilities. I will turn it over to Steve Bruffett for a quick wrap-up before we get to your questions. But before I do that, I want to highlight that this will be Steve's final earnings season with Schneider. I want to thank and recognize his many contributions over the last five and a half years in advancing the company's multimodal and capital allocation strategy, as well as the modernization of the company's entire financial function. I wish him and Susan all the best in retirement 2.0. I'm also pleased that Darrell Campbell has taken the Chief Financial Officer baton, and he is bringing a rich set of financial leadership experiences to our team, and we feel very fortunate to have him. Welcome, Darrell. Thanks, Mark. I'm thrilled to be on board and part of such a strong team. Over the past month, Steve and I have been diligently executing on a well-crafted transition plan, which will continue through the end of the year. I've also been actively listening, engaging, and learning while getting integrated into the business. I look forward to playing an active role in building on our organizational strengths and executing on our top priorities in 2024 and beyond. I would also like to take a moment to thank Steve for his significant contributions to Schneider during his tenure. Thank you, Darrell. Good morning to everyone on the call. Mark provided some good color on our Q3 results, and I'll add a few comments from my perspective. Having been in the transportation space since 1992, this was a unique quarter, given the amount of sequential decline in pricing that we experienced from the Q2 to the third. We expected most, but not all, of this decline. Of all the freight cycles that have happened over the past 30 years, this one's in the midst of what I would characterize as an overcorrection to the freight environment of the prior couple of years. As such, the difficult pricing environment, especially in the network businesses, is temporarily masking otherwise solid execution across our company. While we still have work to do, the portfolio construction and diversification that we've strategically pursued over the past several years is proving to be beneficial. The growth in our dedicated business, both organically and through acquisitions, is supporting earnings in our truckload segment, and over 60% of our total trucks are in dedicated configurations. Also, our intermodal business is well positioned for strong growth and an even more prominent role in our portfolio mix. ... Our logistics businesses, while not immune from the difficult market dynamics, are performing well on a relative basis and are a growth engine with compelling return on capital. We've also been quite effective at managing variable costs in proportion to our volumes and have improved productivity on a year-over-year basis. These efforts are being overshadowed by the sheer force of double-digit price declines, but they are real, and I think our team has done an effective job in these areas. Switching gears to the Q4, we expect the continuation of current market conditions and therefore are assuming little to no seasonal lift from volumes or project activity. I would also note that we are now through the repricing activities across our book of business, and therefore expect no further deterioration in pricing across our operations. Also, we do anticipate that some of the cost items that Mark mentioned will abate in the Q4. For example, we expect fuel to be neutral to slightly positive rather than negatively impacting earnings as it did in the Q3. We expect that there will be some bad debt expense in the Q4, but not at the elevated level of the Q3. On the other hand, we expect Q4 equipment gains to continue to be a sequential headwind and be lower than Q3 levels. Considering these and other factors, our updated full-year guidance for adjusted EPS is $1.40-$1.45. Given our year-to-date adjusted EPS of $1.20, our Q4 is inherently guided to a range of $0.20-$0.25. We expect Q4 earnings to be even with or modestly above Q3 levels. We also believe that this period of time, from the Q3 of 2023 through the first part of 2024, will define the trough of this freight cycle. We'll provide more information on our next earnings call, but we're currently viewing 2024 as a transition year, with freight market fundamentals slowly but steadily improving. And that's barring a catalyst that could accelerate the pace of improvement, which could very much happen. Turning now to a quick update on our uses of cash. Our guidance for full year 2023 Net CapEx has remained stable throughout the year, as OEM production has been more stable and predictable this year. We updated and narrowed our CapEx guidance to a range from $550 million-$575 million, and also we've made $51 million in share repurchases since the May inception of activity under our current $150 million authorization. In closing, I would like to thank Mark and the Schneider organization for the privilege to serve as CFO since 2018, and I'm proud of our accomplishments over that time frame. It's a great team and a strong organization, backed by a rock-solid balance sheet. Schneider's complementary services are operating at scale and set up for continued growth and success, which will benefit our associates and shareholders. I'm also pleased to have Darrell on board. He's already adding value, and I know that that will only increase as he gets further acclimated. So it's great to have him on the team. And with that, we'll open up the call for your questions. At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. Please limit your question to one initial and one follow-up question. Your first question comes from the line of Tom Wadewitz with UBS. Your line is open. Yeah, good morning. And, you know, Steve, a pleasure, you know, working with you, talking with you over the years, and, Darrell, congratulations to you on the new position at Schneider. I wanted to ask, obviously, a pretty tough cycle, I think, you know, on the network business. Mark, how should we think about, I guess, what could drive improvement in that business or the time frame? And I guess you talk about a transition, and clearly price is important, but how do you think about the timing and possible levers for that to improve? I don't know if there's something on the cost side or if it's just really waiting for the market to tighten. Thanks, Tom. I think there's opportunities across the board, both on the cost arena, which we're leaning into and having success with. Secondly, as we and others have been monitoring the supply side of this market, it's been stubborn, uncharacteristically so, to be this late in the cycle, not seeing more improvement. So we not only look at some of the governmental metrics that get published that have a little bit of a lagging effect, we also look very closely at things that are more contemporary, that we have visibility to, such as what we're seeing in our brokerage carrier health, what we're seeing in new driver pipeline into our recruiting function, particularly from the experienced driver, and what we look into with lease turn-ins and other things going on in the owner-operator community. And all of those are continuing to trend as if, the market is correcting at an accelerated pace on a capacity front. And so I think that first and foremost, the tougher the market, the quicker that those things should start to correct. So that's one of the things that we do expect as we get into the new year, that we'll continue to see those trends. Secondly, we do think we have, ... targeted price improvement opportunities across the book. We identified what we don't believe is sustainable positioning coming through, particularly the second and Q3 renewal season. So we think of revenue quality, we think of cost, and we think of capacity, right sizing as our elixir for an improved, network business. Great. Thank you for that. And then, I guess a quick follow-up on intermodal. You sound optimistic on potential for volume to improve in 2024, that the comments on shipper interest. Is volume improvement, do you think that will help on the margin side, or do you think the pricing that's been locked in is going to keep us kind of stuck at that, you know, lower than normal margin level for a while? Yeah, thanks, Tom. I think we have a couple of real margin accelerators that we're leaning into. First, we have been encouraged. We've been in a series of discussions in the last month or so with key customers as we get into the planning session for 2024 and beyond, and where their strategies are, where our strategies are, and how do they align. And we're highly encouraged by the discussion and the objectives that they have communicated relative to looking to improve the percentage of intermodal volume running through their supply chain. So first and foremost, very receptive customer community goals there, I think is helpful. Secondly, we're in the toughest part of the cycle as it relates to our cost position within intermodal. When we go through a decelerating market, while our purchase transportation costs adjust over time to the market, in a decelerating market, that's when we're at the most disfavored portion of the cycle. And so getting to a stable price and an improving price will help us on a cost basis and therefore, help margins. So the combination of those two, Tom, in addition to now having a year under our belt with the UP and working together, the great work that's already taken place with the CPKC into/out of Mexico, which gives us another arrow to shoot into our intermodal basket, and already having a terrific and high-performing CSX relationship that's already employed, I think, to see some good, great improvement in our intermodal business. I would just add on that, I believe the correction in intermodal looked more like the 2017, 2018 correction than what we saw in 2020 and 2021. Meaning that it's more driven by dray capacity than by containers or rail or any other limiting factor. I say that because during this down cycle, there's been a couple new regulations, specifically in the state of California, that are pulling out capacity, specifically out the dray network. Number one, the injunction against AB5 was lifted during this time period, that removing the ability to have owner-operators in the state of California, third parties, third-party dray companies largely rely on owner-operators as well as, ACF. That is implemented. It goes into effect in January. So the last diesel truck that can be added to the dray registry is December thirty-first of this year. All new vehicles will have to be zero-emission vehicles added to that registry, really putting a cap on that. And so what we've done to be able to take advantage of that opportunity when the market starts to correct, is that we don't use owner-operators in the state of California. And of course, both the electric vehicles that we've purchased, we're up to 92 electric vehicles in Southern California, as well as the charging infrastructure that we've built, almost a 5-megawatt charging infrastructure to be able to take advantage of that. Great. Thanks for all the perspective. Your next question comes from the line of Jack Atkins with Stephens. Your line is open. Okay, great. Thank you for taking my questions. I guess, first one is on Dedicated. You're leaning into the Dedicated market for growth. You know, you're not alone there. Some of your peers are doing the same thing. I guess, you know, how are you ensuring that that business is being priced appropriately, given that we're entering into sort of multiyear contracts in a much more competitive part of the cycle from a pricing perspective? How are you putting safeguards around that to make sure you're not going to have an issue there down the road? Thanks, Jack, and good morning. We don't anticipate having pricing issues in the Dedicated business for all the reasons I think you asked the question, is these are multi-year deals. You're very integrated in with the customer and providing either a very, very high level of service or specialty equipment, or other type of configuration that requires protections within how you contract the business and how you price the business, to include how you, over time, have escalators based upon market conditions. And so all of those point to very long-term benefits for both parties, and that's our approach to that, Jack. We're not looking to play in a dedicated space that's just masquerading as one way based upon where we are in the cycle. And so our approach to that, we have very strong disciplines as it relates to that within the business. And the performance of the business through this cycle has been quite strong, and we will continue to expect it to be. Okay. Okay, Mark, thank you for that. And I guess, shifting gears to the intermodal segment for a moment, and kind of going back to Tom's question there. But, you know, if I look at the Q2 to Q3 in a kind of progression within intermodal, you know, your, your revenue per shipment, I think, was down 4.3%, but your cost per shipment was up a little over 3% sequentially. ... Can you maybe walk us through some of the dynamics on the cost side there that are, you know, is it that the impact of Dray, but it, you know, is it the, you know, maybe your rail costs, but it felt like costs were going up sequentially when, when revenue was going down. And, you know, were there any kind of unusual dynamics affecting that in the quarter? On the cost side, just a couple of dynamics, because the network is not completely where we'd like it to be from a balance standpoint. We did have higher empty repositioning into some of the head haul markets that I mentioned in my opening comments, Jack, particularly in service of Southern California and Mexico. We think over time, we can balance that as a network and the actions that we have taken to do that. But secondly, I think it really just revolves around where we are in the cycle and the effect of when our purchase transportation costs adjust based upon market dynamics. And so, in a declining market, as I mentioned, I think that's the most difficult part of the cycle, and that's exactly where we are here in the Q3. So I believe it does get better for us from here. Okay. Thank you very much for the time, guys. Your next question comes from the line of Jon Chappell with Evercore ISI. Your line is open. Thank you. Thank you. Good morning. I wanted to tie a loop on the, on the guide, if I could. You pointed out a lot of, what I would consider kinda one-time costs: fuel, you know, lower, gain on equipment sales, some of the other issues in 3Q, yet the 4Q guide basically assumes a pretty similar, maybe up a few pennies, Q4. So what I'm trying to get at is, is there any continued deterioration in some of the core pricing or margins across the main business lines? Or is this strictly that the gain on equipment sale is going to be substantially lower in 4Q, offsetting any of the type of improvement or dedicated tractor growth that you mentioned in the prepared remarks? Yeah, good question, and thank you. But I'll throw some perspective and then let anybody else chime in. As we look at the quarter, as you know, we don't expect a lot of seasonal lift outside of, perhaps the e-commerce driven part of the supply chain as we get through the end of November. We also looked out to what we expect in December, and I think that's really the key for us as we look towards the quarter. We think certainly October, November will be fairly typical, at least based upon current run weight, run rate in the month of December, particularly the back half. We're a little cautious of what we believe that could look like. And so that, that's a little bit of an influence. But predominantly what you described, we don't expect the gain on sale level sequentially. And we think, as Steve mentioned, that we're pretty much through the pricing reset, and we don't expect any further erosion, and we're only going to be building from here going forward. Okay, thanks. And then, as my follow-up, where you just left off, as we think about the beginning of 2024, I mean, obviously, seasonally, the Q1 is weaker. We're talking about bottoming and pricing and, and kind of all different business lines. Without giving any, you know, level of guidance, conceptually, should we think that 1Q at the very minimum and potentially 2Q, looks very similar, in a lot of the different metrics to the back half of, of 2023 before you start to see more of a reset in contractual pricing or even spot pricing across all three business lines? Yeah, this is Steve. I think in our earlier comments, we suggested 2024 being a year of transition, and I think that from what we can see sitting here today, there probably would be a sluggish start to the year. You never know, something often happens once you switch from December to January and find yourself in a different arena. But we also mentioned that we are seeing some signs of shifting of things and targeted opportunities to begin to see some pricing improvements across our book of business, and so we'll continue to pursue those. But I don't see it just instantly snapping back. So I think the Q1 itself of 2024 will probably be a bit more of the same, but we do believe that there's an upward ramp that begins as we begin to exit that Q1. Mm-hmm. Okay. Thank you, Steve. Thanks, Mark. Your next question comes from the line of Brian Ossenbeck with JP Morgan. Your line is open. Hey, thanks. Good morning. Brian. I wanted to ask more about competition, this time within intermodal. There's a lot of boxes stacked out there. Wanted to see if you could give us a sense of how you're treating that within your network. And then, you know, as we look at one of the main competitors on the Western Rail, they said that they're going to tilt a little bit more towards volume growth next year, which implies at least, maybe not pushing as hard on price as it might have been before. Just wanted to see if you can put that together and give us a sense in terms of how intermodal competition looks and if it's different by any of the quarters you're on. Yeah, I'd say that, you know, still in terms of stacks, I think that was your question. There's probably 10%-15% of the industry on stack. But when, you know, we look out, the market opportunity here within intermodal is somewhere between 2-3 million shipments. And I'm saying that based on getting back to, excuse me, 2017-2018 level of mix between over-the-road and intermodal. ... If we were to get back to that level, that's about 1.5 million shipments that would convert from over-the-road to intermodal. And, you know, we are starting to see some other markets that are opening up. Mexico is a great example, where that mix between intermodal and over-the-road has historically been very low, and now that we have a different level of service, we're starting to taking advantage of that and find opportunities there. We're also seeing customers that are more willing to make decisions based on sustainability, and that is really just an emerging trend. That's why I would say in this industry, there's opportunities for far more growth. But the number one competitor in intermodal, it's not a another intermodal provider, it is over-the-road. That's where the 3 million shipments are potentially coming from, and that's where our focus is. Any specific thoughts on competition within the intermodal space itself, as everybody's, you know, long on boxes, short on volume, at least for the time being? Then maybe, Mark, you can just add on some commentary about pricing and, you know, the level of confidence you have with shippers willing to partner, willing to do some of these conversions, versus maybe take another bite at the apple on rates, as we're still in a what looks like a lower for longer environment. Thanks. Yeah, as Jim mentioned, the number one competitor here is over-the-road alternative. And, with the market that's particularly even some of the head haul markets, which is generally pretty unusual, that there's been a closer competition with truck, and so there's been more choice from the customer's standpoint, to convert back and forth. But as we look at those discussions we've had, particularly with the large, more sophisticated shipper, and looking at their total decision tree, which, as Jim mentions, is increasingly including the emissions reduction portion of that, there's really no better place to go, to achieve that in the immediate and short term than over-the-road conversion to intermodal. And so, there's still, obviously, a healthy gap that you can have between intermodal and over-the-road that can bring economic value to the shipper, you have fuel savings, and now you have the emission piece. And so, again, I think that's why it's raised in prominence on our customers' planning for 2024, and we intend to help them achieve that. Okay. Thanks for your time. Your next question comes from the line of Ravi Shanker with Morgan Stanley. Your line is open. Great. Thanks. Morning, everyone. So obviously, 3Q was a really difficult quarter for you and pretty much all your peers, and yet you were saying that supply remains a little bit more resilient than you thought, and you aren't quite seeing the exit of capacity in the marketplace. And are you starting to see that right now? Obviously, we've seen some high-profile bankruptcies and exits, but are you seeing that in the mom-and-pop side as well? And second, again, why do you think they've been resilient so far, and kind of how do you think that evolves in the coming quarters? Yeah, Ravi, it's been. It's been stubbornly resilient to your question. Part of that could be the buildup that people were able to acquire and retain during the highly unusual pandemic period. But I think any assessment that's been done to look at that would suggest that that has been exhausted, which is, I think, what-- why we're seeing the increased, at least from our portfolio, we have visibility to look into on things like owner-operator or lease turn-ins, just because of the overall health of that portion of the capacity mix up. So those things, again, those are more leading indicators as opposed to lagging, and so that's giving us more confidence that we are long in the tooth here. But it has taken us longer than any of us, I think, would have expected at this point. In reference to maybe some of the more high-profile bankruptcies that you referenced there, what we've seen as an outcome of that hasn't been moving from one brokerage to another brokerage, but moving from brokerage solution to more of an asset play, as I think the customers are also sensing, that is something that's probably in their best interest after, and what we would consider an overreliance, in the last year to 18 months on the brokerage industry. And so there is, I think, because of some of those signals, a move back to more asset allocations within those customers, and we've certainly seen that in a much bigger way coming through the most recent news. Got it. That's helpful. And maybe as a follow-up, kind of you said that you don't expect a snapback early in 2024. I'm just trying to figure out, kind of, is that something that you feel like, given how bad the market is right now, or is that what you're hearing from your customers, and kind of what you're seeing in terms of early moves and early bid cycles for 2024? Yeah, we're not very much into that piece of actual events, Ravi, just yet. We're into more of the discussion phase of, you know, planning, and Q4 is a big time just to get together and start planning and discussing kind of each other's kind of goals in the year ahead. And so we haven't got any real data for you on that yet. But I would say customers are, at least as they feel, and this is a general comment, that the inventories and all the actions that they've taken, they feel pretty good about where they are there. And there's perhaps just some trepidation of understanding where the consumer is. I think the holiday season here will give good insight into that as we move and understand what's inflation, what, and what's actual, you know, amount of goods that are moving through this holiday period. So I would just consider that the customer may be a bit more cautious, but at least I don't think we're going to take in this inventory overhang issue that obviously we took into 2023. Yeah, and I think I'd just add on to that, Mark, that at least from where I sit, the comments I made earlier about entering 2024 were really on a historical basis, volume levels in January and February are typically fairly light. And then once you get to March, things begin to pick up. So there was that side of the equation I was referring to. When it comes to the customer renewal and the tone and of those types of conversations, I actually feel more upbeat about those going forward than where we've been over the past 18 months. Yeah, absolutely agree with that. So, if I separate those two things, that for broader context as we enter next year, so. Understood. Thanks for the color, and Steve, congratulations, and enjoy the retirement. Oh, thanks. Your next question comes from the line of Scott Group with Wolfe Research. Your line is open. Hey, thanks. Good morning. Morning, Scott. So some of the industry data would suggest there's still a pretty wide spread between spot rate and contract rate. Do you see that in your data? And I guess I'm wondering that in the context of you, you're talking a lot about price recovery. You know, are we confident that we're going to get that in 2024? And then maybe just within that, like, where are you more confident you can get it? Is it in truckload or is it in intermodal? Scott, and I'll maybe just open with that, and I'll let Jim kind of weigh in. Yeah, there is still a particularly between contract, our contract and spot rates, and that's certainly influential in our network business as we add... preserve more of our capacity, looking for more opportunities here than has actually arrived in the Q4. And so that's impacting our overall revenue per truck in the network because of that gap. And we're also seeing the gap, but we've seen it stabilize. It's not getting any necessarily any better or any worse, but it's stabilized now for, Jim, probably 8 to 8 to 10- eight to 10 weeks. eight to 10 weeks. Yeah. With that, I think you have to have stabilization before you can have improvement, and I think we have arrived at that location. We know that we have a certain part of our book, and this is particularly in network trucks, Scott, more than the other parts of our portfolio, that we have opportunity, even within this market, to reallocate our capacity to more compensable freight. That's the process we're on presently, and having either A, price discussions to avoid that or start taking action to move and improve the book. That's an all-hands-on-deck effort right now. Yeah, and we're looking at the same data that you are, Scott. That and our internal information would say that it's actually very similar, the spreads being about 30%. And historically, we have not seen a cycle where the recovery is that contract rates come all the way down to wherever the bottom of the spot market is. Rather, you see things like the recent bankruptcy causing the flurry of activity for shippers, and when they go through that, what they often find is the rates that you could have gotten locked in at a contract rate just weeks or months before are no longer out there and available. So the longer you get into this cycle, shippers start to look for that opportunity of: How can I lock into a contract rate that's durable, rather than taking risky opportunities with capacity that might not be available for you or available at that, that price? So I believe that's what starts to change, and that's where the targeted opportunities reside. Okay. And then just separately, you know, it strikes me, you know, the earnings guidance has been coming down throughout the year, and yet you're telling us CapEx is at the high end of what you thought. And I don't think you're alone in that, you know, dynamic of earnings down and CapEx up a lot. And you've got, you know, PACCAR is talking about slots for next year filling up quickly. And so it's just a weird dynamic going on. Just any perspective on, you know, why this is happening, how you think about CapEx for next year, and it just, it's a puzzling environment. Just curious how you think this plays out into 2024. Sure. Oh, go ahead, Steve. I was just going to say, I think what we're dealing with here is, again, the backside of the market environment for the OEMs over the past couple of years, where carriers like us were not able to get all the equipment that we would have otherwise gotten in, say, 2021 and 2022. So there is a bit of catch-up CapEx in 2023 as we are working toward our targeted age of fleet profile. So that is part of the dynamic. It, it's not that we are tone deaf to cash flows and how we're deploying our capital, so. Yeah, and we have the other probably secondary contributor there, Scott, is our dedicated growth and a couple of the acquisitions that we've picked up that we're getting into a place that we think is best and most appropriate. And so we have, you know, specific Schneider event there as well, so. But the predominance is just a catch-up from and some inflationary impacts of those trucks, the ones that we're buying today, certainly have more cost to them than the ones that we're getting out of the fleet. Any early thought on CapEx for 2024? We're working on nailing those numbers. We will provide that guidance on the next call. I would expect the net number to be lower than the level of 2023. Thank you, guys. Appreciate it, and best of luck, Steve. Thank you. Your next question comes from the line of Ken Hoexter with Bank of America. Your line is open. Hey, great. Good morning. Steve, good luck in 2.0, as I got to know you at multiple stops through your career, and Darrell, congrats on the new position. I guess I just want to dig into Scott's thoughts there on the well below contract. So if spot is still well below contract, I just want to understand, given that record gap, and I know you don't have contract come all the way down to spot, but would your outlook now still be negative contract pricing if those contracts continue to at least close that record gap? Or do you think something changes, and you see that adjust? Yeah, I think we're really at the floor for contract pricing, that, you know, there'll be target opportunities from here on out, that to be able to raise that, as well as our mix of spot that we have in our business. Right now, it's higher than what we would like. And so I'd see opportunities to reduce our exposure to spot while it remains lower than contract. And we said earlier, basically through our book of business of renewals, and so the bites have been taken at the apple, and there's no apple left. Yeah, no, I appreciate that add-on, Steve. The reason I asked is just 'cause you also mentioned that you expected the weakness, this level of weakness to continue, and it sounded like if that then goes into bid season, that would mean contracts could continue to close that gap down to spot versus spot coming up. But I get your answer that, Right ... that you're through it. Follow-up would be just on Intermodal, right? So your thoughts on your long-term box adds here. You obviously took CapEx up a bit. You just talked about dedicated focus. Looks like your turns actually improved, but margins were worst that you've posted since before you were public, I guess, back to the Q1 of 2016. Any thoughts on what's going on the incremental margin on Intermodal and the cost side of the equation that we don't see the details to? Yeah. So on the, obviously, there's still leverage to play out there. Mark also talked about the network dynamics of how we're operating, that we're currently experiencing higher repositioning costs, that we need to have better balance within our network. There's opportunities as our PT adjust through this market cycle. And obviously, the number one is to be able to start to turn the tide as it relates to price. So also, Ken, just suggest we could have at least 30% of opportunity to drive volume without adding any incremental container and chassis costs, and it's just pent-up capability. And so as we, again, think through next year, we also wouldn't anticipate, at least at this early juncture, that we'll be adding capacity or, excuse me, capital into containers and chassis. You might see us do a little bit on the tractor side as volumes return. And so there's a lot of self-help in there that we don't have to invest to achieve, and looking to get to that leverage, as Jim mentioned. Great. Thanks for the insight, guys. Your next question comes from the line of Jason Seidel with TD Cowen. Your line is open. Yeah. Thank you, operator. Morning, gentlemen, and Steve, best of luck in retirement. Wanted to drill down a little bit on the CPKC business that you talked about. You said it grew 20%. So a couple questions. One, sort of how big is this, and how big, more importantly, is the opportunity going forward? And how do these early margins compare to the margins in the existing core business? Yeah, so we don't break down the margins within the geographies. But, you know, it is a really great opportunity for us to be able to grow. So currently, there's opportunities of freight that's currently running over the road, and we'd say that there's a few percentage points of difference between penetration between intermodal and over-the-road in Mexico versus other similar length long-haul freight. And overall, it's a very small part of our book, but the percent of increase is much higher, as well as the overall market growth in Mexico, driven by nearshoring. So, you know, the incremental volume is still relatively small, but we'd say that the longer-term opportunity is larger. Okay, Jason, it just opens up some new markets for us as well. As it relates to the automotive sector, as we made a couple of acquisitions now that is more automotive-centric. We've established some deeper, more meaningful relationships there. And but most importantly, is a reliable service product that is truck-like in service transit and the consistent ability to deliver that, which has always been the difficulty. And we've gone through ebbs and starts with growing share of intermodal out of Mexico, that we've had difficulty over time sustaining just because of the service reliability. This combination, I think, has certainly change that, but it's also we have a lot of changing of perceptions to do because of all the prior experience of not being so consistent. A lot of our efforts jointly are getting after that with a series of customers, and we've been very, very active with that the last several months. Because we didn't get a chance to do that in front of the allocation season as much because of the timing of all of this. What we also now have is the benefit of some experience and some proof points, as well as now getting in front of the allocation season, and a great opportunity. When you can deliver truck-like service for a cost benefit and also the emissions benefit, it doesn't get much better than that. You know, you guys are growing this at a double-digit clip, and the rest of the business is obviously under a lot of pressure. Are you experiencing at least some upfront cost to reposition equipment? Yeah, I would say that the two markets, the head haul markets, we would consider northbound Mexico and particularly Southern Cal as two primary head haul markets that because we're priming the pump there, it's a higher percent of costs as we're seeing on empty repositioning, particularly on the West Coast, based upon current rate structures as well. So, it's a bit more punitive in the short term, but again, I think we with balance and with the actions that we've gotten can limit that going forward. Okay. And my follow-up here, Steve, I have to give you one before you retire. You talked about CapEx likely coming down. In terms of the direction for container adds in the box side, you know, given that you have so much ton of capacity, is that one of the directional moves down that we should expect to see in 2024? Yeah, that, that's a good insight there, Jason, and we would anticipate very little, if any, CapEx needs in 2024 for either container or chassis in our intermodal operations. We can leverage the investments we've made in that business over the past couple of years to position ourselves there. Whereas we did have some CapEx in 2023, particularly for chassis. So, that will be part of it, and just an overall assessment of things. But to Mark's earlier point, we have a new acquisition in the fold with M&M Transport, and so there will be some amount of incremental CapEx that just comes from the increased size of the fleet. Sounds reasonable. As well as- Thank you for the time, guys. You bet, Jason. Thanks, Jason. Your next question comes from the line of Chris Wetherbee with Citigroup. Your line is open. Hey, thanks. Good morning, guys. Mark, you had mentioned that you said there were some pockets of maybe better, better-priced freight, that you could potentially move some assets around, depending on what the market environment was. So I'm curious to sort of think about what that might look like. Is that taking assets out of network and potentially putting them in dedicated, or is there, you know, other types of business out there that you think you could capture here? Yeah, Chris, thanks for the question, and my comment was more intra-network. But we'll be opportunistic as well and looking to put our capital in the best place for a return. And if we get even more growth than we anticipated in Dedicated, that could be a secondary decision. But my primary comment there was opportunities within the network itself and within the current environment. Okay. But that... Okay, that's helpful. I guess maybe that leads to sort of a follow-up question around network size as you think about it. Obviously, you guys have done work and acquisitions on the dedicated side to continue to build that. As you look out maybe into 2024, what do you think the mix of network versus dedicated should look like from a fleet size perspective? Yeah, we've kind of stopped our thinking of, or changed our thinking on that over time, Chris, is that we don't have really upward bounds of where we see dedicated growth, either organically or acquisitively, as long as it returns hit our return profile and hits our contract profile of what we're after for durable dedicated. So from that standpoint, we would be all oars in the water and growing as makes sense for us. That being said, we do believe over time that we benefit from having a healthy one-way offering or a network offering. I think increasingly, though, we could see that being more trailer-centric over time, and we're looking to how we best optimize against our company capacity, owner-operator capacity, and other third parties around Power Only. And so, as I mentioned before, you look at our truck count and, well, what we describe in network is one definition of our network, but the other definition gets supported via power only, that resides in our brokerage business, and that's really how our customer sees it. They see our orange trailer out there in the trailer pool, and then we optimize the capacity type. And so our network business is larger from a customer view because of that power-only component. So, so we're not looking necessarily to shrink our assets that we put into that, as long as we can get to the appropriate return. Obviously, we're in a very difficult part of the cycle right now, but it wasn't too long ago, a couple quarters ago, we were quite happy with where we were there. We just got to get back and get those fundamentals relative to the market recovery, getting after the price. It would be terrific to keep that over the long term about where it's at. Okay. All right. No, that's, that's helpful. I appreciate the color. Best of luck, Steve. Thank you. ... Your next question comes from Bascom Majors with Susquehanna. Your line is open. Thanks for taking my questions. Just two quick clarifications on the quarter. Yeah, even if you add back the $0.08 and uniquely negative items, it, you know, and considering that you were pretty in touch with how the mid-season went when you gave us your outlook, in August, it feels like what happened was a pretty significant negative surprise to what you expected and certainly seasonality. Is there, is there any way to kind of rank order the biggest surprises to kind of where you were three months ago to today, knowing what you knew then, then outside of the $0.08 or so in charges that you called out earlier? Just trying to understand a little better about what, what would happen that was unexpected. Thank you. Yeah. Yeah, I understand the question, Bascom. I, you know, I think when we certainly expected to see a bit more of seasonality in the business return after not having, and particularly as what we were projecting relative to the capacity attrition that we expected to take place in the marketplace. So the lack of seasonality that's unfortunately continuing now a bit more than we would originally expect, even into the Q4, is part of that. Some of the final price negotiations and the book, in our book, I think we had about 25% of our book renewed in the Q3. In our truck business, I think 30% might have renewed in our intermodal business, or vice versa. I might have got that backwards. But that's the order of magnitude of the renewals, and so those weren't quite as favorable as we initially had planned as those occurred. And then the third element of that is, what do you realize out of that? And what's the mix of realization that your customers are tendering based upon their business and how they're doing? And so, you know, that's also something we try to project and generally are pretty good at, but this market has more variability and more uncertainty on a series of factors to include where our customers are as well. Thank you for that clarity. You know, we kind of hit this in other ways before, but just want to go back to it. You know, from the, you know, dollar-ish run rate that you're guiding now, you've been pretty clear that there's not a lot of seasonal opportunity to improve on that in the Q1, which makes a ton of sense. You know, as we get deeper into the year, are there meaningful opportunities besides the price lever to really change that trajectory in the back half? Or anything else about seasonality that may not hold versus where you've looked historically in the first half of next year versus the second half of this year? Thank you. The seasonality was the question, first half versus second half. I, I guess, Bascom, how I'd, I'd look at it is, where are we having the opportunity to continue to improve results? And I, and I think, a higher mix of our dedicated offering, which we're continuing to grow and having great momentum, I think is a real positive, not only for 2024, but beyond. We've, I think, articulated the intermodal opportunity, as well, which I think can be a, a real adder to what, we're doing in 2024. And then, you know, the question, always is: Where do we stand on the network of business? And that's the one that we are leaning most into and have the most improvement opportunity. But I do believe we've got good momentum and two key strategic growth drivers for us, which is intermodal and our positioning now that we are no longer in a prove- me stage with our new relationships in UP. We're going through now a full allocation with the UP, with the CPKC and the high-performing CSX. So just, I think, puts us in a better place in the customer mind, in our performance, and where we are and what we're trying to accomplish as we go into 2024, than some of the uncertainty people felt. I think we performed really well operationally, but there was some uncertainty as we made some of those changes coming into 2023. Thank you. The next question comes from Bruce Chan at Stifel. Your line is open. Hey, thanks. Good morning, everyone. Just want to- Hey, Bruce ... dig into brokerage a little bit more. You all saw maybe a little bit more volume pressure than some of the peers out there have been reporting. A few of them were actually, you know, reporting some shipment growth. Any thoughts on what may have driven that difference in experience, if it's, you know, something to do with the mix of business or power only, or if it's just broadly you being more disciplined on the pricing side? Yeah, I think we might get critiqued there of being very disciplined on our net revenue per order and our targets there. I think our data and our insights, both on the shipper pricing and the carrier costs, are very good, and we weren't looking to take risk and losses in this environment. So if we were going to trade, Bruce, we were going to trade on volume as opposed to trade on margin. Okay, that's, that makes sense. Then just a follow-up here on the dedicated side. You talked about, you know, some of the pipeline opportunities and the visibility there in your opening remarks. Some of your peers have talked about kind of maybe some weaker pipeline conversion. Are you seeing the same thing, and what kind of gives you confidence in your visibility there? We might be seeing some elongated pipeline decision-making, but, when you look at our growth organically and, because we've also picked up some acquisitions that are doing quite well in taking some additional share with our current customers, and we're introducing them and their specialty to some other customers, that we just have a few more, plays in our playbook, to get after growth there, Bruce, and it's playing out in our results. And, we have, at this juncture, really good visibility to Q4, obviously, and Q1 startups.... And that's what gives us our momentum. We have, we don't have a lot of closed, you know, second and Q3 startups yet, but we got a good pipeline that, we believe the momentum will continue. Okay, that's fine too. Appreciate the time. There are no other questions. All right. At this time, I will hand the call back over to Mark Rourke. Well, terrific. Thank you, everyone, for your time and attention this morning. I'm just going to close, if I could, by referring you to page 12-15 of our updated investor presentation. As we've talked on this call, we continue to be enthused by our dedicated growth success, success, both organically and through our recent acquisition. The acquisition synergies and the performance are running ahead of our expectations, and it really is just a great credit to the driver shop and operations team at both of those companies. We believe our rail network partners and the relationships we have there are strong, and we believe position us very favorably to take advantage of those substantive opportunities to convert over-the-road movements. We enter the next allocation season, and we have a year now under our belt with both the UP and over six months with the CPKC, in addition to our long-standing alignment with really the best-in-class provider, CSX. We're also addressing our largest improvement opportunity in the network truck business by looking at ways to better optimize our contract and spot market response to price and capacity commitments through how we combine company driver, owner-operator, and third-party resources, including our power-only options. Then finally, our strong balance sheet does give us optionality to enhance shareholder returns through reinvesting in our core business and services, but also by providing attractive dividend yields and the pursuit of additional acquisitive opportunities that advance our strategic priorities, and a continued targeted share purchases towards our previously announced $150 million buyback program. Thank you, and look forward to our follow-ups. This concludes today's conference call. You may now disconnect.