Amit Mehrotra: Thanks a lot. Hi, everyone. Sean, I wanted to just follow up on that question around 3Q to 4Q, but maybe ask it as it relates to 2024. I mean, obviously we’re moving from a very inflationary environment to a less inflationary environment. You’ve got a little bit of labor — another uptick in labor in the middle of next year. But then I also look at like PS&O, is that — 19% of revenue, several years ago was as low as 14%, 15% of revenue. But there’s obviously some opportunity to get more leverage on the cost structure, especially on that big PS&O item. So, I don’t know if you can kind of help us enter your brain a little bit and think what is the cost structure look like in ’24? Because, obviously, we’re still in an inflationary environment, but you still got maybe these chunky, idiosyncratic opportunities to kind of leverage some parts of the cost structure.
Sean Pelkey: Yeah. Amit, obviously, we’re still in the planning phases for 2024. So, I don’t want to get too far ahead of ourselves here. But you know the story on labor and just to make sure everybody understands and to level set, we’re going to have a 4.5% wage increase mid-year next year, that’s the last year of the contract with the union employees. That’s a step up from the 4% increase that we had mid-year this year. In terms of PS&O, at least on the inflationary side, it’s early, but I think it’s fair to say that we’ll start to see some normalization of the inflationary pressures from this year. So, we had mid-single digit inflation this year. It’ll probably be a little bit less than that, but certainly higher than the five-year average as some of those outside service contracts are based on lagging indicators or labor indices that are going to reset.
So, suffice it to say, I do think we’ve got fewer headwinds overall going into next year than we did going into this year. And that sets us up well. We’ve got cost and efficiency opportunities, but I think more importantly, Kevin and the team are building a really nice pipeline of growth that really stems from the way that we’ve been serving the customer over the last year. And that sustained service level as well as some of the initiatives the team has been working on, that’s really what’s going to drive growth as we get into next year and beyond.
Operator: Your next question comes from the line of Tom Wadewitz from UBS. Please go ahead.
Tom Wadewitz: Yeah, good afternoon. Wanted to see, I guess, it’s kind of staying in the same topic, Sean, but if you think about 2024 and volume sensitivity in terms of how the OR performs, do you think that there’s a chance that you could see improvement in the OR if you don’t see volume growth? And perhaps related to that, from a pricing perspective, I think sometimes people think that there is a time delay on some of the pricing with multi-year contracts and there might be catch-up on pricing related to inflation. So, I guess, it’s kind of two things within that, just OR sensitivity to volume and also potential catch-up on pricing. Thank you.
Sean Pelkey: Yeah, Tom. So, I mean, our plan is going to be to grow volume ahead of the economy, that’s what we’re going to shoot for, that’s what we’re going to plan for. So I think if we were to have no growth next year, I think it would be tough to improve the OR with the continued inflationary pressures that we’re seeing. You’re cycling. We had that insurance settlement earlier in the year. So, there’s a few things there. Depreciation will continue to go up, things like that. So, we need growth. That’s what the model requires and that’s what we’re building into the plan. Kevin, I don’t know if you want to address the price piece.
Kevin Boone: Yeah. On the pricing, roughly 60% of our business reprices every year and 30% of that is kind of carryover of what we’ve already touched this year. So, we’ll touch the other half going into next year and the environment is still supportive and it certainly helps when the service product is vastly improved. And we’ll continue to price to our service levels, and those are up. And so, it’s a conversation that customers expect. Our labor inflation is very visible to the world. We have those discussions. They’re not unexpected from the customer.
Operator: Your next question comes from the line of Allison Poliniak from Wells Fargo. Please go ahead.
Allison Poliniak: Hi, thanks for taking the question. Just want to go back to the domestic intermodal side. You’re starting to see some conversion from truck here. When you’re talking to customers, what’s really starting — holding them back from converting at this point? Is there something in the service product that you have to evolve, or is it just simply building that trust with the reliability that you guys have had over the past few months? Just any thoughts there?
Joe Hinrichs: Yeah, to reflect on the pandemic and that’s — the domestic intermodal and our intermodal franchise performed very, very well. It really was outshined the industry in a lot of ways. What minimized our growth opportunity was really the chassis and some of the equipment limitations that existed. So, obviously, we’re in a very, very different world today. And so those limitations don’t exist on a year-over-year basis. And we’re really seeing the team able to capitalize on that. And the strength of our service product is really coming through. When you see what we talked about in the chart that we mentioned previously is, I think all those things are coming together. Service leading in the East, and then allowing our customers to grow with us with our service product.
Operator: Your next question comes from the line of Ken Hoexter from Bank of America. Please go ahead.
Ken Hoexter: Hey, great. Good afternoon. Mike, welcome back to the sector and happy to have you here. Joe or Mike, I guess, just operations seem pretty solid, right, in terms of how well you’re operating and obviously you still want to improve. And maybe Mike, just talk about what — I know you’ve been there for a month, but what do you see as, I don’t know, if it’s low-hanging fruit or opportunities on operations? It sounds like Sean saying or Kevin saying, you need the volumes in order to get that operating leverage, but are there things you can do on the cost side from what you see that can aid that leverage opportunity?
