Brian Alexander: A little bit of both. Like I said, we saw a lot of growth in our customers from that Yellow exit and we protected our customers from that. We did pick up volume there but we also get new logo wins. Our brokerage team is adding anywhere from 80 to 100 new customers a month and so as we do that, then we cross-sell into those. And our brokerage also offers a diversified subset of modes as well. So outside of just dry van, our Choptank acquisition really built out a nice temperature controlled offering as well as our LTL rates that we bring to the table flatbed and other sub modes that become very meaningful to our customers. So it’s a good overall balance of growth.
Bruce Chan: Great. And just a final follow-up before I turn it over. We had a fairly high profile competitor exits in that space last week. Just want to get your take on that and whether you anticipate any major changes in the market as a result.
Phil Yeager: Sure. I wouldn’t reference any major changes. I think it’s just an indication of how challenging the market can be and having brokerage as a key capability that you can bring to customers as part of a full suite of services I think is very important and something that we’ve tried to utilize. We think our model works and we’re continuing to invest in the brokerage products. So feel good about our positioning for the long-term there.
Bruce Chan: That’s great. Thanks for the time.
Operator: Thank you. Our next question is from Thomas Wadewitz of UBS. Please proceed with your question.
Thomas Wadewitz: Yes. Good afternoon. Wanted to ask you about the ITS operating margin and just how we should think about the potential levers for improvement? I know you’ve talked about volume and being a bit more aggressive with some of the bids and winning volume. Is that kind of a key lever to see improvement off the level in third quarter? Or is it more appropriate to think about pricing being the lever and you kind of wait for potential improvement in rates in the bid season next year and second half? Just wanted to get a little more perspective on what really kind of drives potential improvement in the timing as well.
Phil Yeager: Sure. I think we have a good feel for the market at this point and have positioned ourselves well. We’ve seen some nice wins, as I mentioned in the latter portion of bid season and even some out of market opportunities. So I don’t think it’s taking rates lower and we’re currently have that pricing fully baked. What I think we see as the opportunity is this time frame last year, which I referenced, about 43% of our freight is pricing effective in Q1. That is a significant opportunity where we lost shares over the road. And given some of the question marks around the spot market as well as customers taking a deeper look at fuel prices and aggregate costs, I think presents an opportunity to leverage the strong service we’ve had and that disparity in contract rates to garner some of that volume back.
Thomas Wadewitz: So you think that if you get the volume back in 1Q, 2Q, that can be a meaningful margin lever or you think it further off than that.
Phil Yeager: Yes. We’re getting the container fleet unstacked and driving more velocity in the network will reduce the fixed costs and help us really – with the efficiencies we’ve gained in headcount drive a better flow through to the bottom line.
Thomas Wadewitz: Okay. And then I guess on the brokerage side, I mean, your results in brokerage look very good, the 5% volume growth in a tough market. So kudos for executing well in that business. I wanted to see if you could give us a sense of the mix of spot and contracts? And how you would think about the risk that eventually the cycle is going to happen and spot rates are going to go up. And that can be a risky time for brokers just in terms of the gross margin percent pressure and potential impact of profitability from that. So what’s the split look like and how much of a potential headwind is that if spot rates move up in first half of next year?
Brian Alexander: Sure. Yes. Tom, this is Brian. I’ll kind of start even last year. So as we look at last year, we moved our brokerage it was about 60% spot and 40% contracted. Throughout this year, we were very focused on growing in our contracted volume and we saw that kind of level off right around half and half. And what’s really good about the growth within our contracted volume is we really leverage that volume with our carriers in the way that we purchase that transportation to really make sure that we can contain that spot, capacity and price. And so we feel well positioned that as that spot starts to grow, our capacity in the truckload marketplace starts to exit and it starts to press up that we have a really good model and a good balance with those carriers to keep that contained, but while also making sure that we’re recovering it with our customers as well.
Thomas Wadewitz: So you don’t think we should anticipate pressure if spot rates rise or it’s manageable amount of pressure?
Brian Alexander: It’s manageable in our model.
Thomas Wadewitz: Right. Okay. Great. Thank you.
Operator: Thank you. [Operator Instructions] Our next question is from Ravi Shanker of Morgan Stanley. Please proceed with your question.
Christyne McGarvey: Thanks. This is Christyne McGarvey on for Ravi. I wanted to circle back to the capital allocation announcements specifically calling out on the acquisition front. Doesn’t feel like that’s super new for you guys. So just wondering if you’re trying to signal anything different going forward in terms of pace of transaction or type of transaction that you guys are looking for going forward.
