Ken Hoexter: Do you provide kind of cargo claims levels or on time performance numbers relative to peers or is that not given?
Judy McReynolds: Well, I mean, Ken, I think there’s a lot to consider when you do that. And so our preference is to not do that, but it’s not because we’re shy about it. I mean our service levels are good and customers value them. But there are lots of comparison issues when you look across and we’re fully aware of those. Especially because we have our managed offering and we do business with a lot of the carriers that are competitors or regional carriers and we see those differences. But on the cargo claims side, we’ve been best-in-class for a long time as that 10 time winning award indicates.
Ken Hoexter: And then just to clarify, at this point, do you still talk, I don’t know, excess capacity or what is available to still switch between the core and the transactional side?
Matt Beasley: So, we have opportunity, we’ve talked about before to do that mix update. We still have plenty of runway there to grow our core business and make room with transactional. But we also have upside just in total shipment count to grow and we’ve demonstrated that over the last 12 months that we can handle more business. We can bring on more of that variable expense that could give us upside in total shipment growth as well. So I don’t know, Seth, if you want to speak to any of that.
Seth Runser: Yes. I would say on the long-term network side of things, we talked about the whereas we’re adding there. And I really view growth and capacity. It’s not just the physical doors you’re adding or the people, it’s also the efficiency gains that we have. So when Judy was talking about the facilities to an earlier question, what we saw as a good example in 2023 is we opened a facility in Camp Hill, and we had our Carlisle facility where we transferred some of that freight over to Camp Hill. And when you look at the combined operating ratio of those two locations, that’s improved over 600 basis points since we opened that facility. So I view efficiency as a lever for growth. And we’ve seen that in our real estate plan and that’s where we’re investing our dollars.
So I’d say overall, we probably have about 15%, 20% latent capacity right now. So we feel pretty good about where we’re at from people standpoint equipment and real estate perspective as well as efficiencies.
Operator: Our next question comes from Chris Wetherbee with Citi.
Unidentified Analyst: It’s Rob on for Chris. Could you give us an update in terms given the terminal you guys were able to acquire from the Yellow auction. Could you give us an update on your thoughts about the total shipments per day you’re targeting in the network today relative to the $20,500 you guys were talking about last quarter?
Matt Beasley: Yes, I would say it’s really fluid to be honest with you. So we’re targeting honestly as much growth as we can get. So I would say in the, what our real estate plan is based around is around 25% growth and that’s really what we’re trying to achieve in the longer term obviously. But I would say we’re really doors wide open on the growth side of things.
Judy McReynolds: And then you might get in the detail of your, of the what we bought. The locations we bought.
Matt Beasley: On the actual, Yellow real estate side of things. We purchased three properties and then did a lease buy out of one. So we purchased Des Moines, Springdale and Columbus, Ohio. But that really is part of a longer term real estate plan that we’ve had. So in 2022, we added about 135 doors to the network 2023 about 299 doors to the network and then in 2024, we plan to add about 347. The Yellow property accounted for 77 of those door adds. And those were markets that we’re already in, we already do business in, but we saw an opportunity upgrade whether it’s doors or yard capacity or whatever the case may be because we see growth opportunities in those markets.
Unidentified Analyst: And then just for my clarification piece, on the shipments per day, there’s just a lot of noise in kind of core tonnage per day. There’s a lot of noise given the transactional business you guys were doing. Can you speak a little bit about the sequential trend from December, from fourth quarter that you’re seeing so far in the first quarter, just so we level set kind of expectations from a volume perspective?
Matt Beasley: So I think overall our shipment count is down, if you think from third to fourth. And then going into January, I think in January, we were averaging right around 19,000 shipments per day, similar for December right around 19,000 shipments per day. And like we talked about earlier, some of that is a weather effect that we think there’s upside as the weather clears up to handle more like Seth was talking about. We’re managing that on a day-to-day basis. Our sales, yield and operations teams are closely connected there to make sure that we’re getting the right result from a short-term positioning standpoint, but also preparing ourselves for long-term growth.
Matt Beasley: And Rob, we did share in the 8-K this morning. We are continuing to see higher transactional prices year-over-year which resulting lower transactional volumes. But core shipments, as we moved into January, were up 6% core tonnage, I’m sorry, yes, core shipments were up 8%, core tonnage was up 6% as we moved into January year-over-year.
Operator: Our next question comes from Jack Atkins with Stephens.
Jack Atkins: So Seth, if I could go back to something you were talking about earlier, which was sort of this idea that you’re kind of positioning the network over the long-term for 25% shipment growth levels. I guess, how are you thinking about core LTL market growth over the long-term? I mean, do you think it’s kind of GDP, GDP plus, just kind of what are some of the drivers there? If you could maybe talk about that?
Seth Runser : Yes. I would say it’s a mix of everything. Obviously, the macroeconomic conditions, PMI, things like that are obvious indicators, weight per shipment. But the way I try to look at it is a view of our pipeline and it’s robust and there’s a lot of opportunities that are coming our way as shippers are looking for long-term logistics partners. And I think about how our strategy is working because being an integrated logistics company with assets allows us to respond to customers like we did throughout the turbulence in 2023. So, we leverage both of our networks, the asset-based and asset-light networks to meet our customer demand. So, when we see the shift to more core business, it’s allowed us to be more strategic with our resources. And when you look at most recent pandemic years, it was challenging to find labor. So, we’re trying to position ourselves for the short-term and the long-term for these growth opportunities that we see in our pipeline.
Jack Atkins: Yes, absolutely. I’m sure there’s a lot of demand for a high service network like yours. Okay. I guess for my follow-up question, just kind of back to the yield commentary. We’re seeing continued acceleration in terms of contract renewal rates year-over-year in the fourth quarter. Are you seeing customers wanting to pull renewals forward or I think another carrier talked about seeing a significant increase year-over-year in renewal rates. Just the number of renewals in the fourth quarter, are you seeing that as well? We’ll just be kind of curious about that.
Matt Beasley: Yes, I don’t know that we’re seeing necessarily a change of trends and renewal rates. We’re constantly evaluating those renewals, making sure that we’re getting compensated for the service that we’re providing. One trend that I am seeing as it relates to renewals and bids is that there’s an interest among the shipping community in diversifying carrier base and not relying just on one carrier. So, I think that really plays well like Seth was saying into our integrated logistics approach that plays well into our managed solution, where if they want to diversify the carrier base, we have a stable of carriers that we’re able to introduce to them to really de risk their supply chain to not be overly reliant on one or two carriers.
