Covenant Logistics Group, Inc. (NASDAQ:CVLG) Q4 2022 Earnings Call Transcript

If we were to eliminate what’s happened on the “broker” side of us having to go to the outside brokerage and get it. I would be very happy if where our pricing is at the present time. I take — I look at this and brokerage has gone from 1s the 5% kind of usage. And the rates on that for are 1990 rates. I mean it’s the most horrible thing I’ve ever seen. The rates are pathetic, especially coming off the West Coast. I think a lot of that because of everything that’s happening in China and the boats aren’t coming in and Chinese New Year’s lasted longer and — but the West Coast has been very difficult. And so the rates out of there are just horrific rates. That said, take that out of the picture, and I’m very pleased with the rates. And again, we probably got 2 or 3 more accounts that we got to hold our nose to hold our breath and hope and pray that we’re able to get there because as Paul started off some — a little bit down, some flat, a little up.

That’s what we’re seeing. It’s not — everything is down because it’s not down. Yet if we can replace and I really believe in the next 30 days, I hope I’m right because of the pipeline, I really believe in the next 30 days that we’re going to have a bunch of the brokerage freight that’s going to be replaced and their rates are almost double what we’re holding. So if I get 6% of that double on rates, it’s going to help what I’m seeing so far in January with the market being down, but just floating on that downward just — it’s there. I haven’t seen it go down again. So, hopefully that helps.

Paul Bunn: I’m going to add one thing to what David said is that — you asked early in your questions about the changes and volatility and peak the trough and all that. Here’s what I would say. I used the word niche on last quarter’s call. And I would tell you, everywhere we’re we are niche and people really need our teams or they really need hazmat heavy haul dedicated? Or they really need — where we’re providing value, things are holding in there just incredibly well in this market. We do have — there’s still a little bit of business that’s commoditized here and there. But every day, we’re trying to find where we can be more value-add and itchy — and the commoditized people are going to do what the commoditized people are going to do.

I feel like we’re probably down that path, but we’re going to keep working on that path every day. Good market or a bad market. And eventually, that saves going to become 80 or 90. And that niche stuff where we add value for our customer, and they add value to us, we want to get that to 100%. And so that’s part of what to David’s point is protecting us thus far in this market. And it’s really — it’s the pressure points are in 2 places where we still have a little bit of commoditized business. And then where we don’t have enough freight in certain geographies, and we’re having to haul broker freight. So we keep working on those 2 things, it will be good.