All right, we're going to get started here, just continue on the Fireside Chat series at our Deutsche Bank conference here. Very happy to have Werner Enterprises, Chairman and CEO, Derek Leathers, Executive Vice President, Chief Financial Officer, Chris Wikoff, Senior Vice President, Pricing and Strategic Analysis, Future Planning, Chris Neal. Werner, I'm sure everybody knows here, really high-quality truckload company, majority of its fleet in the dedicated market, but still also a big presence in the One-Way truckload market. Obviously, it's a very, very dynamic time in truckload. We've had incredible highs, we've had incredible lows, and, you know, we're looking forward to just getting an update on where we are today and where we move forward, and what the expectations should be for the next six to nine months. I'm going to hand it over to Derek and, and the team, who's going to go through, maybe five or seve minutes of prepared remarks, and then we'll hop right into the Q&A. Over to you, guys. Thanks. Thanks for having us. Chris, you're going to kick us off? I, I am, yeah. Thanks for having us, Amit, and Deutsche Bank for hosting us and giving us the opportunity to talk about Werner and give you an update on the company. My name is Chris Wikoff, Executive Vice President, Treasurer, and CFO for Werner, and as Amit mentioned, joined today by Derek and Chris. Excited to be here and give you an update on the company. Before we get started, just direct your attention to the disclosure statement on slide two. Some housekeeping and fund disclosures here. We may have forward-looking statements in our remarks today that involve various risks and uncertainties and other factors that can cause results to vary materially. We may also refer to non-GAAP measures for which a reconciliation is provided in the appendix of this presentation, as well in as in our most recent earnings release that's posted in the investor relations section of our website at werner.com. As many of you know, and maybe not others, I joined the Werner team nearly four months ago. It's truly a privilege to be the next CFO with Werner. I've spent over 20 years in corporate financial leadership for Fortune 1000 and larger companies during times of change and transformational growth, and I couldn't be more excited than to be part of Werner in this time in the company's history. A reputable brand competing at the highest level within the freight and logistics marketplace with winning customers, culture, and associates. Werner is a company that's evolved over nearly seven decades with operational excellence, safety, and service reliability at our core. As one of the largest public truckload and dedicated carriers with over 95% customer retention rate within our dedicated offering. Werner has tremendous scale with 14,000 associates, near 8,300 trucks, over 30,000 trailing assets, and a network of over 70,000 qualified carriers within our brokerage business. Last year, for 2022, our revenues were $3.3 billion, consisting largely of Truckload Transportation Services segment, or TTS, plus our growing asset-light logistics segment. Within the TTS segment, approximately two-thirds of our dedicated business, TTS is our dedicated business, a premium, highly integrated offering, serving large enterprise customers with complex, complex freight needs. The remaining one-third of TTS being our One-Way truckload business, consisting of highly engineered lanes, team expedited and cross-border solutions, including our Mexico cross-border franchise, where we, we are one of the largest providers. Logistics is our fastest-growing segment, consisting of truckload brokerage, dedicated final mile, and Intermodal. We have a portfolio of winning customers and unique verticals. About two-thirds of our customers are well-known, highly reputable retail customers, the majority being non-discretionary and discount retailers. We have over half of the top 50 largest U.S. retailers as our customers. The other third of our portfolio is with manufacturing, food and beverage companies, and other verticals. Similar to retail, we have over half of the top 50 largest U.S. food and beverage companies in the U.S. also as our customers. While large enterprise customers make up the majority of our business, but we're seeing accelerated momentum in growing our small and medium customer portfolio through our brokerage business by combining our qualified carrier network that I mentioned earlier, with boots on the ground industry expertise, recent, customer-facing, cloud-based, branded technology solutions to bring small and medium shippers and carriers together. In 2016, Werner launched our focus on the 5 Ts: Talent, Trucks, Trailers, Terminals, and Technology. We've since further evolved to our DRIVE strategy, focused on fueling a business model that's D for durable, R for results-oriented, I for investing in innovation, and V and E representing our commitment to our values and ESG. We see our DRIVE strategy being realized and playing out in several ways. First, through our brand recognition, known for superior safety and service reliability. Through our operational scale and capability that continues to earn us the opportunity to win hard-to-serve freight challenges of our customers. Durability in our revenue, even though we've been in this challenging freight environment, where we see, we're seeing stability and growth from our strong and steady dedicated offering, plus our growing asset-light logistics business. Next is operational innovation and where we're seeing recent advancements in cloud-based, customer-facing technology solutions. Also, our financial strength through consistent operating cash flow, strong balance sheet, and access to capital to fuel growth and return value to shareholders. Operating scale and reach is one of our numerous competitive advantages. Throughout the U.S., we have nearly 30 terminals, over 20 driver training schools, and numerous final mile and dedicated locations. From which we can reach over 90% of the U.S. population within 150 miles. In addition, we have one of the largest and most expansive Mexico cross-border franchises in the industry, with 11 locations along the U.S.-Mexico border, including one of the largest cross-border terminals in Laredo, Texas, plus over 100 Werner associates throughout Mexico and four company locations and numerous carrier alliance partners. We've built this expertise and capability for over two decades, started by Derek Leathers. As a result, we're well positioned for the momentum that has been building with nearshoring. Trends in nearshoring are real, evidenced by increased foreign direct investment into Mexico and through our active dialogue with shippers and customers about their growing freight needs in and out of the Mexico market. In terms of our recent financial performance, here are some highlights. Our top line revenue is performing well, down $25 million or 3% in the second quarter of year-over-year, up 3% year-over-year for the first half of 2023. Fuel surcharges drove $42 million of the second quarter year-over-year total decline in revenue. Excluding fuel surcharge volatility, our Q2 revenue was up 2% year-over-year and up 5% on a year-to-date basis. We're leading in our peer group relative to year-over-year revenue performance, despite a softer freight market, showing the durability and resiliency of the Werner business model. Our dedicated business performed as expected, growing revenue per truck by low single digits, while in One-Way trucking, we minimized the year-over-year revenue per mile decline to low to mid single digits, outperforming industry peers and benchmarks, and staying within our first half guidance range. Logistics continued double-digit revenue growth trends, driven by a strong volume in truckload brokerage and 15% revenue growth in our dedicated final mile business. Adjusted EPS and adjusted operating income were both down 40% and 34% respectively year-over-year, driven by lower equipment gains, higher interest expense, and inflationary factors. Consolidated adjusted operating margin was 6.3%. Adjusted operating margin for TTS, our largest segment, was 9.7%. On a trailing 12 -month basis, the TTS adjusted OI margin, net of fuel, was at the low end of our long-term target range of 12%-17%. In the second quarter, certain expense categories are showing improvements such as supplies and maintenance and insurance and claims, which was down year-over-year. Our cost savings program continues to progress with process rigor and organizational discipline. Over 40% of a $40 million+ in-year savings target was achieved in the first half of the year. The majority of those targeted savings are structural and sustainable. Additional integration savings from past acquisitions is expected in 2024, along with more tech-enabled savings over time. Also to mention, our operating cash flow remains steady and is up modestly in the second quarter, year-over-year as well as year-to-date, running at about 17% of revenue for the first half of 2023. We remain focused on reinvesting operating cash flows into the business to maintain a lower age and operating cost of the fleet, while maintaining high safety and service standards, and to get ahead of future emission changes. In closing, we have a powerful, resilient, diversified business model, including dedicated and One-Way Truckload logistics. Our approach has created clear and compelling advantages that will continue to fuel growth, durability, and earnings. We have significant scale. We're uniquely positioned to serve the most complex freight needs. Our comprehensive footprint and terminal network enables us to reach all areas of North America. We have the largest Mexico cross-border franchise and truckload, with deep experience operating in this complex environment. We have a long history of leading in innovation, primed to benefit from recent advancements in technology. And lastly, we continue to attract and retain top talent, with a focus on superior safety and service that allows us to retain our strong portfolio of winning customers. Thanks again for joining us. We'll open it up for Q&A, and that, that's what we had for prepared remarks. Okay, thanks, Chris. That was great. I'm going to maybe kick it off by a question you've probably already gotten today, and we'll get at every start of every meeting. How, how's it going out there today? I know you guys are on the market every day. Maybe we can start on the One-Way side. We're kind of in this interesting point in the year where, back to school, maybe we're thinking about peak over the next month or so. Any, anything out there to just get a little bit excited about, or are we still kind of bouncing along the bottom? Sure, I'll take that. you know, it might be a bit early to be excited. Might not be the right word, but, certainly, we think that the worst is largely behind us. Q2 was very difficult. I've been doing this for over 30 years, and Q2 was about as rough a quarter in terms of the overall demand picture and what was happening out there within the network, as I've seen in my career. I think we largely have, kind of survived to fight another day and, and get through that. Dedicated, as Chris mentioned, held up very well in Q2. Both current dedicated as well as future demand and pipeline opportunities still look good in dedicated, and we're excited about what that looks like as we go forward. One-Way was under, obviously, considerable duress. We are largely through the bid season, so that's part of the reason we believe kind of the pain is largely behind us. In One-Way, we stayed disciplined on pricing, and you saw that show through with our, our year-over-year rate per mile metric, which is, you know, took about 0.5 or a little less than 0.5 of what the industry average was in terms of where rates went. We did that by... That discipline meant having to walk away from opportunities throughout the bid season when that was the right decision in our mind, which meant we woke up with an outsized exposure in, in the spot market compared to historical averages and where we'd like to be. We felt that was the right decision, so it was consciously done. It was strategically done because it's our view that the the spot market, where it was at today, was sort of at the bottom and now, and kind of been bouncing on the bottom. We think as we look out into Q3 and Q4, the opportunity for inflection is there. probably more importantly is it's the ability to create, to take the pain in the short term, place those, those assets in the spot market, and prepare for even a muted back half peak season, which we believe is probably where we're headed. And those trucks being redeployed at either contract or better than contract rates. And, and, and so tying all that together, you're right, we are in that back- you know, the back-to-school push is, is, is largely behind us. We've seen some uptick, from certain customers, but I would kind of zoom out a second and say that, like, rather than looking for impetus moment, let's talk about things like destocking. You know, the inventory destocking has made significant strides, especially across those winning retail customers that we work with. They are, they are largely through that pothole. They feel pretty good about their inventory levels and have commented so publicly as well as privately. More importantly, I think they've, they've redeveloped and redeployed of the SKUs that respond better to what customers are buying. Within their, their mix, they've got the right inventory now set, and they've set the stage for normal replenishment type cycles to start taking place. So that's encouraging. The consumer's held up more resilient than we probably would have thought, given how tough inflation has been on the consumer. There's, there's lots of small. There's no silver bullet, there's no one moment, but there's lots of small indications that make us feel better as we think about the go-forward environment. The last piece is what has continued to happen and will continue to happen, we believe, more rapidly in the back half, is the capacity attrition that's taken place through carriers that bought overpriced equipment or high-priced equipment throughout COVID, many times with variable kind of debt structures behind it within their organizations that are waking up to high- higher interest rates, high-priced equipment, and very low spot rates, because that's the world they live in, and they're going to continue to be flushed out as we go through the remainder of the year. If I hear you correctly, 2Q, obviously very, very tough across the board. What's interesting is, is that the utilization was positive, barely, for like the first time in 9 quarters. If I look at, you know, your yield performance, if you had kind of not agreed to contract rates and participated more in company load or spot markets, whatever, I would have thought the, the yield would have taken a bigger hit. Is there something happening in terms of the utilization of the assets, whether it's for length of haul or whatever, that's kind of changing the mix of that One-Way a little bit to protect you guys? Yeah, very much so. We've talked for several conferences in a row now about our leaning into further engineering our One-Way network. The questions we often get asked is, if dedicated is a stable franchise and it's 63% of your assets, why not make it 100%? Why not make it 90%? The answer has always been that you need a One-Way, a viable One-Way network, because it really is the farm system for everything from new customer touches, which then develop into dedicated relationships, to new driver entrants into our fleet, to know who's, you know, to kind of know what their capabilities are and then be able to place them in these high-performing dedicated accounts. You can't afford that farm system to cost too much and to be too volatile. What we're doing within One-Way is really leaning into engineering that network more and more. That's finally paying dividends and showing through in, in productivity because there's really three legs to the stool. Cross-border Mexico, which is a high production, high efficiency kind of marketplace from Laredo to a final destination and back. Team expedited, which by definition is us getting more aggressive at more niche businesses within One-Way that are harder to compete within. The third one is engineering what's left over and really trying to get as far away from the you call, we haul, kind of commoditized end of the network and further into dense, designed lanes of traffic that are not dedicated. We don't want to put them into the dedicated business and muddy those waters, but they are dedicated-like in how they operate. Those advancements continue. We think there's more air there for us to continue to pursue, and we think the ability to kind of hold, serve, and continue to even improve on utilization in One-Way is kind of a bright spot right now in the outquarters as we look forward. I think the other thing helping utility is the reinvestment in our fleet. We've got our fleet age now down to 2.1 and 5.1 years, respectively, with tractors and trailers. Fewer tractors that are out of warranty, fewer, less downtime, better terminal velocity, all those things continue to, to help with that utility. As we think about the very near term, I'm going to get to kind of more about 2024 and longer-term strategy stuff, but if we think about 3Q, you've got a little bit more pressure sequentially on, on gains, you know, coming off. It doesn't seem like the freight selection environment's getting a whole lot better. It's not getting worse, it's not getting a whole lot better. Are we kind of at these levels from a, at a low 90s OR perspective until we really see a more meaningful uptick in volumes, hopefully in the 4th quarter? Do you think that, you know, you're seeing enough opportunities where we sort of move a little bit in the right direction and come out to some of those gains in the 3rd quarter and show improvement sequentially? Take it from a headwind, tailwind perspective. Headwinds, we have guided to the fact that pricing will take kind of a, a small step down even further from bids that were completed in Q2, that implement in Q3. We think there's some offsets there. We see a little bit of lift in the spot market that, that, that develops in the latter half of the quarter. The, with the potential to have a, a little more pain on the pricing side in One-Way is there for Q3. Gains are going to be a headwind in Q3. Those will... Where do the offsets come from? You know, we have made progress and continue to make progress on supplies and maintenance. We've made progress, and we'll continue to make progress on product- productivity, fleet utilization, some of the things that are happening there, this engineering work that we've talked about. We have, we upped a goal for the CARGO initiatives, the, the inter- term we use, but our, our cost savings initiative. We think we can continue to ramp that as we get into the back half. Will they offset roughly? That's, you know, gonna be tough, and we stated that on the call, but we, we would Q3- there's not a lot of compelling about Q3 that makes it look largely better than Q2 just yet, other than all that economic backdrop. We're not really economic, but the, the backdrop of inventory levels, retailers getting their, their, their distribution of their SKUs better, and the consumer, largely holding up, thus far. As Derek mentioned, more pressure on the One-Way side. However, on the dedicated side, where we have over 63% of our trucks, you know, we continue to have a revenue per truck per week on a year-over-year basis that, that's up. Yeah. You know, it was up three, I think 3% year to date, year-over-year. And, and just on the, on the customer destocking side, I mean, the customers just went through probably one of the biggest destock cycles they've ever been through. Mm-hmm. So it's understandable that they're kind of maybe skittish to restock shelves, especially with so much uncertainty happening. Then retail sales today were pretty damn good. The consumer, like you said, Derek, is holding up well. Do you think there's, there's going to be an opportunity for kind of a mini restock cycle towards the end of this year when we all come in in November or October, November and say, "Hey, well, listen, we don't want to be stocked out because demand's actually holding up well?" What are those conversations like with your clients? Yeah, I think more of a normal replenishment cycle is where those conversations are. Again, I'll keep pointing back to, you're right, they're skittish. There's no doubt about that. But what they are gaining confidence in is the mix. So as they gain that confidence in the mix and have figured out the post-COVID consumer, you know, much better than they had when, when we first came out of it, the ability for them to have the right goods that need fast replenishment because they are the faster moving goods, is in front of us now. I'm, you know, pretty impressed by some of the, the, the name brands, if you will, that we hitch our wagons to every day. Yeah ... and their ability to perform during this environment. and, and, and, as we have those conversations about fall, it's encouraging. Is it, is it going to be one of the, like, a pre-COVID peak? You know, I, I think it's way too early to, to make that statement, and, and, and we're certainly not making that statement today. I think the opportunity for the worst to be behind us is increasingly clear. When we, when we started this year, you and, and most other transportation comp CEOs were almost defiantly bullish in January, because January was pretty good, and January's never been worse than March. If January is pretty good, then maybe we build from that from a seasonality perspective. That was completely understandable, but it's just been amazing, kind of the counter seasonal moves in freight flows we've had this year. It's kind of payback to, to what happened during COVID. As you now kind of recalibrate all that, what you've seen, what's, what's kind of the shape of the, of the cycle in 24? Is there an opportunity to see kind of a more meaningful improvement, or are we is this kind of a slow slog recovery until to where we were pre-COVID? Yeah, I mean, I think let's go back to the January statement. I mean, I think the things that were different this cycle than things that we've seen, no matter how long we've been in the industry, we underestimated the cash pile that small, medium-sized carriers had built up over COVID and have allowed them to survive longer than we thought they'd be able to. At least inside our walls, I would tell you that I was, I underestimated the resiliency of them being able to survive below their operating costs for as long as they have, but I think those days are over. We've done a lot of analysis on this, and it's our belief that the, that that stockpile that they may have built is largely depleted, and yet spot market is, is still scraping on the bottom, well below their operating costs. I think that now starts to happen. I think that was one issue. The other issue is, clearly underestimated the consumer behavior relative to how dramatic the shift to services really was. goods versus services and, and their willingness to kind of go all in on experiences, travel, services, concerts, and everything else after having been pent up for two and a half years in their, in their, you know, bedroom, working from home. Yeah. I think that's where the miss came from, or the overoptimistic outlook came from. As far as the recovery, again, if the consumer resiliency stays firm, which thus far, they're still in better shape than I think most of us thought they'd be. At this point, if retailers have, in fact, cracked the code on what it is they do want to buy and need to buy and will buy, and it's all more in the nondiscretionary categories that they have to replace and continue to buy going forward, if we see attrition, that is it's been now 46 straight weeks of, of net attrition, in our view and the way we measure it, it continue, there is an opportunity for what I would call a slow, gradual recovery into 2024. That's really still our overarching view. The stuff that keeps me up at night is, you know, where the interest rates go from here and how much more pain can the American household take? Where does inflation sit, you know, six months out from today? How much of that core inflation, particularly energy, takes a bite out of their wallet? Then you counter that with how many experiences can you go on before you realize, "Okay, I've done all that now," and that, too, that wallet share shift goes back to maybe a normal level. Yeah. It was all products for two and a half years. It's way heavily weighted toward experiences today. I think at some point it goes back to a normal distribution. Any questions for Derek and Chris and Chris [audio distortion]? Have you done a lot of analysis around small, medium players that are overextended, if you will, in terms of surviving? ... great session. Can you elaborate on that? Like, how much capacity was affected, and why you think that? Yeah. On the analysis side, this is as much art as science, I will admit. What we did is had to take a step back and try to ask ourselves the question, why are they not leaving quicker? We went back and looked at 2020, 2021, 2022, looked at average rate levels that these carriers would have been operating at compared to where their operating costs were. Tried to make some assumptions around how much cash they may have accumulated and how profitable they may have been, and then compared that to prior cycles. The answer was, they were sitting on a lot more cash than they would have ever been sitting on going into any downturn that preceded this one. We tried to ask and look at where spot rates have been now since really started to decline March of last year and all the way through the first half of this year, and how long would it take them to burn through that cash. Best guess we have is sometime around June. We think that's when the, you know... Now, you're using a whole lot of averages in this analysis, right? So, you, you buy with caution. That is a reality. Based on what we've looked at, we think they're kind of out of money, and now they're just operating with fuel going higher, spot rates still dragging the bottom. No more cash, you know, that was built up coming into it, and there's nowhere to go but e- but, but out or, or, or, or shrink and, and try to survive through selling off of un- underutilized assets. That's, that's that answer. The, the, the net deactivation stuff we look at is we basically take FMCSA data, look at number of trucks associated with each one of those authorities, how many deactivated each week compared to how many activated each week, and it's 46 straight weeks and about 120,000 power units that are net deactivated over that period. We bounce that against BLS data, which because some of those trucks and/or drivers will show up in BLS data as an employee driver now, and wash those two against each other, and that rate of wash is now increasing because BLS, BLS data is flat to slightly negative now, finally, and yet the deactivation rate is increasing and building. We think that's where you start to see the wash. Lastly, you've got some consolidation going on, which is always helpful from a pricing discipline perspective, especially in this most recent large-scale consolidation, where a very disciplined player is acquiring somebody who maybe had a different characteristic than that historically. If, if we do see, kind of more, maybe a more robust, because, you know, in January, everybody's bullish, now everybody's so negative. You know, the answer is probably in between. If we do get maybe some, some improvement in the spot market, I'm just trying to understand how, how quickly your One-Way business reacts to that, because obviously the majority of business is contracted out, but, you know, I know you guys watch compliance against those contracts pretty darn carefully. I'd be curious to, to understand if this cycle... I know, I know you have great customer relationships, and your customers need your partner, but I wonder if the seduction of the spot market just caused that compliance number to come down. You know, you'll remember that when, when the volumes come back and the spot market comes back. Is there anything there in terms of your ability to kind of capitalize on a spot market very, very quickly, just given how maybe customers have reacted during this freight recession? Yeah. I mean, I'll start with the most important part of all of that, which is I will absolutely remember Q2 very well for a long time. We'll be the same professionals that we always are. We're going to treat people with respect and dignity, but that's defined by how you're treated. We were treated very well by some folks, and, and a large swath of our customers stood up, and they were who they said they were. Others were not. Those relationships are defined by them, not us, and we'll, we will, we will respond appropriately. Because to not do so would be inappropriate to those customers that stood tall during this time, and, and they, they deserve us to reciprocate positively with them. The [OOM, the opportunity set, though, so because of the discipline we've displayed in Q1 and Q2, we now have, call it, mid-double-digit spot exposure. That spot is very depressed, as we know. So the, the gap between spot and contract works both ways, meaning everybody's been worried contract was going to reset the spot. We said all along that wasn't going to happen because contract business is more complicated than spot business, and it, there, there's some overlap, but not as much as there used to be, and there's less every single mid-cycle. By contrast, those trucks that are running in spot today can move tomorrow. They could move midday today into contract opportunities as volumes start to pick up, as these SKUs get reset. Yeah. Inventories get reset. There's, there's lift opportunity without kind of premium pricing even needing to take place. Are we seeing that right now in terms of, like, spot trucks and spot market that you have finding its way into more contract opportunities? Our spot exposure is decreasing weekly right now, but it's not like material moves yet. There's been multiple weeks in a row where it's slightly less than the week prior, and I expect that to continue as we move forward. Chris Neal, as we think about this gap between contract and spot, maybe crystallizing where we are today, spot, hopefully, we all thought spot would improve quicker than it has, here we are, and maybe, maybe it will. Does that, does that inform kind of customers in your interpretation about what maybe contract rates do next year? Are we kind of flat to kind of up next year, or are our customers going to still look to take another? I guess it maybe depends on volumes. It's too early to tell, but curious about what your best guess is as of the moment. Yeah, I think it is too early to tell. Peak season is going to be cloudy. You know, we've, we've still got, what, four months left, in this year. I think it'll be interesting to see. I, I, you know, I, I think as you look at normal cycles and you think about that 18-month kind of time period... ... We're right there. If you think of spot starting last March, here we are in almost September, you're, you're about that 18-month mark. I think it'd be unusual to see two years of, of down rates in a row, especially with this kind of inflationary environment. When you, when you think of the capacity attrition that's happening and, and will most likely accelerate as you think of fuel now beng up $0.50 in, in 4 weeks. Yeah. that's gonna put a lot of near-term pressure on folks that are already in a pressured situation. Our view is that it's, you know, certainly unlikely, given the very difficult environment, that we would have another down year next year in terms of One-Way trucking pricing. Still very early, things are dynamic. As it relates to the, the, the change in contract or, the, the variance between contract and spot, you know, that's roughly about $0.50-$0.60 if you look at industry-wide metrics. I think that's our opportunity, is as things get a little better, we're able to exit to that spot, as Derek mentioned, without any increase in, in peak pricing opportunities. Every percent you can decrease your spot exposure and move it up into that contract area is not insignificant. Chris Wikoff, the headwind on gains, are we normalizing next year in terms of the year-over-year? I know there's a big headwind this year. Are we normalizing on gains as we walk from this year to next year? I think the, the resale value is gonna continue to be compressed going into the first half of 2024. Potentially, there's a change in, in the second half. It, it can be lumpy, depending on how we are receiving new equipment and then how that plays into, you know, us selling some of the older equipment. We have communicated on our total 2023 CapEx guidance that's gonna be a bit more elevated as we're catching up on OEM deliveries from the last couple of years. We think that that's the right thing to do to get that fleet age down. Along with that, you know, we'll continue to be focused on, you know, selling the old equipment. I think it's gonna continue overall, equipment gains to be compressed even going into, next year, just given the market. Yeah. Any, any, anything to talk about on Yellow? I know, obviously, you're not an LTL company, but, you know, Yellow and LTL use a lot of truckload line-haul capacity. Anything there that's notable, or is it just kind of on the margins? The way, the way I would think about it for us is, obviously, you know, the, the direct and immediate beneficiaries are the other LTL carriers. Sure. We've seen that happen already. We do, though, in our team expedited portion of our portfolio, do line-haul replacement for LTL companies. We've seen some benefit from some of that business now coming and being awarded to us to do line-haul replacement. That's small. It's very immaterial at this point. I think the bigger picture issue is that it's caused them to be flush with freight. The remaining LTL companies are more flush with freight, their bandwidth for expansion, as some of these other topics that we've been discussing, if it play out, that freight is more likely to land in a truckload environment now than LTL, because LTL's networks are a lot healthier than they were before Yellow went down. Are you having those conversations with, you know, people that manage PT relationships with LTL companies? Yes. in terms of that's, that's dramatically increased? Yes. Got it. Okay. One thing I wanted to talk about, you guys have been talking about this more, more as kind of this Chris Wikoff bringing kind of a fresh perspective. Mm-hmm how to do things better inside the company, and you guys were doing things pretty good, before. That's always caught my attention. Derek, you've focused a lot of it in your comments about how excited or energized you are about having kind of that new perspective in the business. Wondering if you can expand on that a little bit in terms of how much there is to really offset some of this pressure that's transitory right now, but actually sticks with the company in a better market, and then, you know, you're, you're, you're suddenly making, you know, the returns of the business reflect that, that work that's being done right now. Sure. I mean, I, I will take you back and say even to our last C-level hiring before Chris Wikoff, which was our CIO. Both our CIO Daragh Mahon and Chris Wikoff, came from outside the industry. In both cases, I do, I do believe this is a well-rounded organization, professionally managed, with a large group of strategic thinkers in the building. But having two in a row from outside the industry to come in and really question everything is healthy, it's, it's wanted. Our team has responded well to it. And, you know, it really is a breath of fresh air. I think I might have even said that on the call. You know, in Chris's case, challenging the asset intensity of this business is healthy and really making us you know, repressure test all of our assumptions is great. His tenacity around the cost side of the equation and asking: Why not? Why can't we go deeper there? Why can't we find more efficiency? The accountability he's placing around putting better metrics in place to scorecard investments and where we're placing our bets and how, and is been healthy. It's early innings. I mean, he's been here four months, but feels longer than that at times. He's been here four months, and it's just been outstanding. The number of times... Well, you know, internally, you know, we have obviously, a series of updates that happen on various cadences- Yeah Fridays, Mondays, and then monthly. Every time one of those goes out today, Chris sends back 15 questions to whoever the sender was, wanting more detail and more, more follow-up and more color on every point in there. What these EVPs and VPs, these various divisions are coming to me telling me all the time is: 1, it's difficult. It's, you know, he's, he's asking for a lot. 2, they like it because it's really causing them to double down on all of their efforts and to respond to all of these questions. That may not be as specific as you're looking for, but I can just tell you the, the breath of fresh air comment is really the right way to think about it. It is just breathing life into an organization that already had a lot of, I think, bright people doing, doing good work, being challenged to be better. Can we, can we just elaborate on that, that asset intensity comment you made? Obviously, Power Only has been a big thing over the last several years, and, you know, you've got a big trailer fleet, but it's kind of three to one trailer tractor ratio. It's, I mean, What is, what is the asset intensity focus, and does it really just focus more on the logistics piece of the business? Obviously, higher returns on invested capital, just talk about, you know, what you're strategically trying to do there. I think what I'm really pointing to is challenging and making sure that we think about our business and every dollar we invest from that, from a return perspective. Mm-hmm. Just challenging that just because. Let's take dedicated as an example, very asset intensive, but the returns are outsized in that area versus One-Way, as an example. But making sure at each individual fleet level that we're taking that same level of discipline. The logistics clearly is an opportunity for us to be less asset intensive, as is, frankly, in One-Way. Power Only is part of our logistics portfolio. It's managed and led through logistics, but it operates within our One-Way network. Yeah. because that's the, the freight base that it, that it, that it lives within. How do we make that a larger component of, of how we go to market with the movement of freight versus trying to go to market with, you know, blue is better? Yeah. Really, what matters is the service expectation of our customer, being able to deliver on their needs, and being able to do so in the, the least asset-intensive way, but assets still matter. We're not deviating from that reality, but we think we can, we can do it better. By the way, we're well north of three to one on a realized basis because many of our dedicated fleets operate with truck-only configurations. Got it. It's not as easy as just looking at total trucks and total trailers. As Power Only grows, we're very comfortable with our trailer ratios to be able to continue to grow it. Just on the dedicated side, I know you guys have worked for so many years trying to make that truly dedicated and truly sticky. That obviously was tested this year and over the last 12 months. I would say you passed that test, just give us a little bit of color on kind of, you know, how that business operated, how customers stuck with you, and maybe they can get cheaper alternatives temporarily elsewhere. Yeah, it stood up really well. I mean, I couldn't be more proud of how the resiliency of dedicated stood up during this downturn. You know, we, we absolutely, customers have some flexibility in every one of those contracts, so a 50-truck fleet could go to 45. A 100-truck fleet might be able to go to 90, and still be well within the terms of that agreement. We're going to be flexible and allow for that kind of flexibility, because if there's no flexibility, then one of the biggest reasons to go to a dedicated format versus having your own private fleet would be taken away. So we have to provide for some ability to expand and contract. Obviously, this was a year more of contraction than expansion at the individual fleet level, but, but, but in terms of contracts being torn up and people going elsewhere, basically, virtually nonexistent. There's been no change at all in renewal rates through this entire downturn. The reason for that is these are truly hard to serve, dedicated, difficult to replicate or, and almost impossible to replace type fleets, and that's what we said we were going to build toward over the upcycle. When things were really good, we still kept a very high wall with a very tall guard in dedicated to make sure the stuff that got in there was truly dedicated. The other stuff we do, it's not that we don't do regional moves or continuous moves or, or those types of fleets, but they reside in One-Way. That's where those productivity gains are coming from. That's where us further engineering One-Way, but if it sits inside our dedicated portfolio. it's because it's dedicated. How much, how much optionality do you have in those dedicated contracts to flex to spot so you're not locking yourself into low contract rates, for example? Well, for starters, the dedicated contract rates in general are premium, at a premium on a per mile basis to One-Way because it's harder to serve work. You're not locking in the low rates, you're locking in the premium rates that require premium service and have premium characteristics about what's expected. In terms of our ability to flex, if spot was to suddenly catch fire, that's a pretty good indicator of what is happening with the overall consumer behavior. If that's true, those dedicated fleets have the opportunity to expand. Incremental trucks beyond contractual terms are usually an incremental negotiation as well. I don't want people to get the belief that, like, we're never going to be the carrier that suddenly abandons our day job to go chase spot rates. We didn't do it during all of COVID. We peaked during COVID at maybe 15% spot exposure in our One-Way network. Could have chased further, obviously, but at the expense of the long-term strategy of how we wanted to structure this portfolio, and I don't suspect that'll be different this time around if spot was to suddenly get elevated. The good news is, if it got elevated today, I've got mid double digits of my trucks already there. So I don't have to pull from anybody to take advantage of that. They're already sitting there. I think the more likely scenario is they leave spot and go to contract instead, as a more immediate relief mechanism. In addition, we've got our, you know, our growing logistics segment, which we haven't talked a lot about, but, you know, nearly $1 billion now with our Reed acquisition. Our ability to capitalize on an improving market. ... would be not only in the One-Way side, as Derek just mentioned, with maybe a little outsized spot exposure, but also, through a much larger logistics segment than we've had in the past. Any other final questions for Werner? I was gonna ask one final one. Five years from now, breakdown between dedicated assets versus One-Way assets, are we kind of at that point where it gives you enough optionality, flex capacity in the One-Way, or can we, we move more towards that dedicated business? I think five years from now, we will definitely be more proportioned and dedicated, and that One-Way network will be more proportioned toward Power Only. So when you talk about assets in particular, the asset size of that One-Way network would be materially smaller as a percent of total assets five years from now than today. A big change then, versus where you are today from a, from a cyclicality perspective. Correct. CPKC competition to Mexico, will we discuss that? Yeah, there's always gonna be advancements in intermodal. The competition from that merger is a potential for a step-level change in terms of what happens. If you compare the capacity that that would bring to bear to the amount of investment, direct foreign investment that's taken place in Mexico, and our positioning in Mexico with the type of freight we haul, which is not really intermodal freight. We have an intermodal franchise ourselves. We do intermodal into and out of Mexico. The bulk of what we do into Mexico and out of Mexico is freight that's not naturally paired with the intermodal networks today or post-merger. We, you know, like the idea that there's more optionality for our intermodal customers over time. We understand that there'll be some mode shift that'll take place as part of that. We think overall growth in that marketplace outpaces the mode shift, that, that, that is in the out years. Any final questions before they head to their next meeting? Cool. Yeah, just to stick on the five-year theme, how much, you know, cross-border business as a percentage of overall, or how much faster do you think that's gonna grow over the next five years? Yeah, that's a great question. That one's a little tougher because there are limits to how big our Mexico franchise can be in, inside of our One-Way network. We are not at those limits today, but Mexico has got a very large share of, of the pie. Call it, you know, the high 20% kind of number right now. We, we are always looking at trying to understand, as we further engineer our network, what is the literal tipping point where we can only be so much north, south, and you have to have the connective tissue of east, west to make it work? We're not prepared to put an outer limit on that just yet, but it's not gonna be 50%. You know, so we're, we're trying to figure out how big can it be before it disrupts our ability to serve all of the other east, west needs and up and down the East Coast and everything else that we do. Those, those, those push-pull exercises are constant in our building, and those network design, debates are constant. With the opportunity of growing the One-Way business more to, to facilitate greater cross-border versus the dedicated side. I mean, that sounds like a huge opportunity, but you want to have the full network out there. Logistics plays a larger role. We have the largest terminal on the southern border, and it's really not even close. We've added additional land for further expansion. We've built one of the only inside of a carrier yard, fully functioning cross-dock with both refrigerated and dry capabilities. Our ability to expand on that facility and be able to use assets to the border and then Power Only from there, Power Only on both sides of the border, and have a trailer through service product that a Werner truck never touches or any combination therein, is how we're gonna build more optionality into our north-south franchise. Thanks a lot, guys. Appreciate it. All right. Thank you very much. Thank you. We have Norfolk Southern CEO coming up next in about 10 minutes, so if you want to stick around, 11:00 A.M. Thanks. 12:00 P.M. Thanks. Appreciate it. Thank you.