Kevin Roycraft: Yeah, I would say that’s 73,000 of truck barrels, right, and we have additional barrels that aren’t reported in the same year.
Liam Burke: Okay. No, no, that’s perfect. And in terms of the expense at GulfMark, you really pushed back on — it’s a tight margin. You push back. How much more can you do to move those margins?
Greg Mills: Yeah. We will continue to work on that. We actually have been successfully renegotiated some labor rates already for this year going forward. And again, we’ve dash boarded our business now. So we’re looking at every — down to every district level, and we’re managing costs. I feel very confident that we can manage our costs and give our marketers the best opportunity to continue to push the margins.
Tracy Ohmart: I would say, one of the key things as well, it’s within our control, but sometimes it gets difficult to manage is the safety and the insurance aspect that, that can have. And so, I know Greg can talk about the new cameras and other equipment we’re doing and enhancements we’re trying to make from a safety standpoint to continue to drive it down or try to keep insurance rates as low as possible.
Greg Mills: Yes. What Tracy is referring to is, we’re rolling out a new more elaborate camera system that effectively monitors behavior of the drivers to ensure that they’re maintaining the utmost safety. And then we also have additional views that we haven’t had in the past exterior to the truck. And so we’ll know everything that’s going on around us, which we find is going to be very helpful with our insurance risk.
Liam Burke: Great. Thank you very much.
Kevin Roycraft: Thank you, Liam.
Operator: The next question comes from Chris Sakai of Singular Research. Please go ahead.
Chris Sakai: Hi. Good morning.
Kevin Roycraft: Good morning, Chris.
Chris Sakai: Just a question, I guess now for GulfMark. Should we be looking at 4 barrels per day for Q1 in 2024? I mean should that be — how should we be thinking about that?
Kevin Roycraft: I’d say relatively flat to Q4, Q1. We’re continuing to have — we have had some uptick as we get into this month March. We did have an uptick in some barrels, which also complemented the VEX Pipeline. Supply has been up a little bit. But overall, I’d say, it’s relatively consistent and we’re continuing to — in a high market share or a high competitive market, we’re continuing to hold our own. We have consistent business and continuing to maintain strong margins.
Chris Sakai: Would that be the same thinking for Service Transport for the number of miles for Q1 and 2024?
Kevin Roycraft: Wade, do you want to take that?
Wade Harrison: Yes. I think one thing that we’ve seen through I guess, kind of the quarter-on-quarter bid season is kind of a gravitation towards more shorter-haul business. And so, we’ve noticed an increase in our load count and a decrease in our kind of mileage per load. And so, that’s not necessarily a terrible thing, because we can typically hire more drivers for localized business. And so through this bid cycle, we have seen kind of a shift in what we’ve been awarded. And so, we might see a decrease in our overall mileage just from that result. We’re still dealing with some of the kind of downturn in volume from heritage customers, but the business that we have been awarded seems to have been more on a local regional type basis rather than the 500-plus mile loads. So, while I do anticipate a downturn in overall mileage, I don’t think that will be total reflective in the results of the company.
Chris Sakai: Okay. That’s helpful. And can you talk about capital expenditures for Q1 in 2024?
Tracy Ohmart: Yes. I can take that. I mean I think we have set out to really replace about 20% of our fleet every year. We’ve extended that out a little bit that we’ve seen better performance out of the tractors. But generally, that’s what we’re trying to do. But we received the benefit of closing down the Red River operations. One of the benefits was we were able to take about 25 tractors of the late-model tractors, because we had refreshed that fleet. And we’re going to move that into the GulfMark and Firebird operations, which will really decrease their need for 2024 CapEx. And then Service Transport they use a different type of trucks. So they’re using the over-the-road sleeper trucks. They’ll stay on a pretty similar trajectory that we’ve seen over the last few years. So I do expect CapEx for 2024 to be lower. And because of those reasons the Red River closures Service Transport will remain the same. And then 2025 we’ll get back on a more normalized CapEx.
Kevin Roycraft: The early part of 2024 we’re still seeing some carryover from orders that were placed years ago. So the first quarter we’re still seeing a little bit of spending nothing significant, but there’s still a little bit of activity that’s being brought forward from orders that manufacturers hadn’t yet delivered.
Tracy Ohmart: Yeah we are still seeing delays not like we had before, but we are still seeing delays from the manufacturers producing equipment that were ordered in previous years.
Chris Sakai: Okay. Great. Thanks for the answers.
Tracy Ohmart: Thank you, Chris.
Kevin Roycraft: Thanks, Chris.
Operator: The next question comes from Jason Ursaner of Bumbershoot Holdings. Please go ahead.
Jason Ursaner: Good morning and congrats on the very strong cash flow in the quarter. Kevin I apologize if you already said it but the gradual recovery you’re, kind of, expecting to start to see later in the first half what are any signs you’re looking for or how are you going to kind of know that that’s progressing? What are you sort of looking to see there to kind of see that that’s on track?
