Greg Mills: Yes. And same with GulfMark, too. So with us moving those Red River assets, those are 60 tractors, Half of those — generally, half of those will be sold or are in the process of being sold right now. The newer equipment, the later model equipment will move into GulfMark and Firebird, replacing some older equipment there that will also be sold and really eliminate the need for any tractor or trailer purchases for Phoenix — or sorry, for Firebird or GulfMark in 2024. So some significant savings there.
Chris Sakai: Can you talk about driver retention at Service Transport. How was that, was that this quarter?
Kevin Roycraft: Wade, I’ll let you take that one.
Wade Harrison: Yes. So we actually — we performed very well during Q3 with driver retention. It’s — I guess, it’s a positive and it’s a negative for the guys. Despite our lack of work, they really, quite frankly, didn’t have anywhere to go. Our terminals did a good job of spreading the work around as best as they could. We’ve actually relaxed our hiring. Normally, it’s hire, hire, hire. And we didn’t put a freeze in place, but we were very, very selective on who we did bring in. We wanted to make sure we kept the wages as high as we could, and we actually saw quite a benefit of that. We’ve already reached our year-to-date — our highest referral count that we saw all of last year. So we’re doing a good job with the volumes that we have, and it’s showing up in our turnover.
So we’re on track to beat last year’s turnover, assuming Q4 goes as planned. We do expect to bring on some additional guys during the fourth quarter just to boost up our numbers based on the addition of volumes we expect to see come January. And so we may see some — a little bit of turnover through that. But for the most part, we’re actually doing pretty good.
Kevin Roycraft: And I’ll just touch on, I think, an important key to that is we do try to hang on to the driver base even in the slower times because we’ve seen these cycles before, need to be ready to react when the markets return. Those with capacity will benefit, and we want to have that capacity. But also our drivers on both sides at GulfMark, all 3 sides, Firebird and Service Transport are paid either by the mile or by the load. So when there’s fewer miles and fewer loads, they take a natural pay reduction. So there is some savings from that, it correlated to the levels of business.
Operator: [Operator Instruction] Our next question comes from [Jason Eisner] with [indiscernible]
Unidentified Analyst: Nice to see the recovery from last quarter with some solid results and thanks for taking a couple of questions. Just talking about the GulfMark business, do you have a way to kind of better characterize the value-added sales and gross margin in that business? Or maybe talk about, I guess, how much of the underlying crude that you’re marketing is a pass-through kind of spread business? Because I think one of the knocks that you’ve gotten is revenue bounces around with a lot of volatility. And if you look at the gross margin that you report, it’s pretty low if you’re including that underlying product. But as the spread volume business, I think the quality and the margin profile is a much more attractive, sustainable level. So I don’t know if you have a way to kind of characterize that better.
Kevin Roycraft: It’s challenging. I’ll say that in some terms, not from an investment perspective, from a business perspective, we keep that margin a little gray because we’re providing — we’re negotiating on both the buy side and the sell side. We’re providing transportation services to move the oil either from the field to the pipeline or the field to a storage location and then eventually on to the barges. And then we provide the barging service — the loading for the barging service. So one of the reasons we don’t really release what that margin is because we have — we don’t really put out there because we wanted a little flexible to be able to — if we need to reduce transportation costs to improve the ability to buy or sell the oil, we do keep that intentionally gray. So it’s very difficult to really report the margin piece. I don’t know if you have any piece on that, Greg, or what advantage that…
Greg Mills: Yes. I mean we monitor kind of our internal view of the margin continually and obviously, to ensure that we are understanding what the cost is to transport from the buy to the sell side. And then ensuring that — and that gives us, I guess, the way that I’d say is an ability to understand the competitive market, and we’re competing with a lot of folks that really just kind of buy on a volume basis. They’re feeding either a refinery or a pipeline. And our business model is different just because we are buying from a lot of long-time relationship operators. We provide a higher level of service and consistency, and then we’re negotiating with the end-user processors of the oil. And even to the extent that we’ll put together specific distillation curves that each of the processors are looking for.
So it’s a lot — I would view it not as a volume just for the lower-margin business, but it’s a higher-margin service-related business. That also probably limits us in terms of the total number of barrels that we can purchase and sell. I don’t know if that was helpful.
Unidentified Analyst: It is. But I guess maybe putting it another way, when I — guess, when I look at the gross margin being very low, I think that kind of brings up a lot of risks if things swing negative versus as kind of a service business where it’s a value-added sale, it’s a different characteristics. So I guess maybe without getting into the margin, which I understand what you’re saying on — from a business perspective, I want to give you that, Greg. But I guess is there a way to characterize the risk in that business, how long are you holding it versus or almost all the barrels that you’re marketing, are they already kind of spoken for by the time you already have…
