Thomas Wadewitz: Yes. Good afternoon. Wanted to ask a little bit about what’s behind the optimism on volume growth in intermodal and just think about where is this — shippers are really kind of interested in the conversion and the better backdrop on rail service gives you that momentum? Is it the share gain or the improved volume performance? Is that really at the expensive truck? Or are you thinking about maybe competing better against some of the other intermodal players? Just some more perspective about the improvement in intermodal volume as we look at ’24.
Phil Yeager: Yes. This is Phil. We are very focused on, once again, finding the right business that’s going to fit our network. But yes, we are very focused on returning to growth. As we mentioned, we don’t think Q1 is going to be a positive year-over-year volume growth, but that will improve on growth rates as we go through the year. One is low comparables in the back half. So that’s certainly an aspect of it. But at the same time, it’s discussions with our clients around incremental wins that we’re actually receiving and then their forecast for the year as well. And with the service levels we’re providing, we’re winning a lot of awards and positioning ourselves to really take advantage of the market upswing here. And so it’s a mix of comparables, confirmed wins and then discussions with our customers around, how they see their supply chains adapting throughout the year.
Thomas Wadewitz: Do you think it’s more share gain from truck or competing better versus some of the other intermodal players?
Phil Yeager: We’re targeting track. I think we’re winning a lot of short-haul business right now. Sometimes it’s more challenging to tell exactly where it comes from. But I think our main target is truck.
Thomas Wadewitz: Right, right. Okay. That makes sense. One more. You’ve built a nice portfolio of services you can offer. You talked a little bit about cross-selling. What do you think is the kind of the best hook with the customer when you go in something they really want and is helpful for cross-selling and perhaps an area that you might want to build out additional capability.
Phil Yeager: Yes. So we’re able to really open the door with any customer based on our intermodal capabilities and our service reputation. I think that’s certainly our way in. Once we’re there, it’s about finding the right solution for what their supply chain requires, it could be anything from something as simple as transactional brokerage to a consolidation program to a full outsource or just managing their LTL. We find that our managed transportation capabilities, we can come in with – especially given the inflation that has been taking place in the LTL market with what we can do with consolidation and managing their LTL spend as a very sticky and strong service offering. But when we combine that with our warehousing capabilities, it becomes even stickier, as Brian mentioned.
So it really does depend on the customer and their specific supply chain. But when I think about where we’re at now, I think we have the right set of capabilities. It’s about building specialization and scale within them and finding the right cultural fit that will help us continue to drive that growth. So I think you’ll see us continue to be active in non-asset logistics M&A, but also be very thoughtful around our approach in adding to those core capabilities that we’ve developed.
Thomas Wadewitz: Okay. Great, thanks for the time.
Operator: Thank you. Our next question comes from the line of Ravi Shanker of Morgan Stanley. Please go ahead, Ravi.
Christyne McGarvey: Hi. Thanks. This is Christyne McGarvey on for Ravi Shanker. Just wanted to take a step back a little bit. You guys issued some long-term targets a couple of years ago now, and it seems we’re quickly approaching 2025. So maybe you can talk about kind of confidence and path to some of those long-term targets? And if I can, maybe thoughts as we approach them, how you guys are thinking about kind of the next benchmarks that you guys are looking to benchmark against?
Phil Yeager: Yes. So, we’re not ready to publish any new targets. Certainly we’re very focused on the 2025 targets we’ve set. We have some work to do on the revenue side, but I think our guidance shows that where we think we’ll be is relatively consistent and we’ll have the opportunity to achieve that target. We operated this year and the prior year within and above the range on operating margin. I think our guidance is also within the range, obviously. And we think that with a positive inflection in the market, we’ll be well within that. So certainly, our focus is on achieving both of them, and we think both are doable.
Christyne McGarvey: Great. If I could squeeze in one more. You’ve been talking about it a bit on the call, but maybe to ask it a slightly different way. In your customer conversations thus far in bid season, the over-the-road conversion, it seems at least collectively as a market it’s sometimes been harder to prove out than maybe hoped for. It sounds like there’s some inflection here in those conversations. You alluded to kind of rail service confidence coming back. But is there anything else in terms of customer priorities or what they’re telling you that makes the over-the-road conversion a little more attractive here?
Phil Yeager: Yes. Yes. I think our customers are looking for service. They’re looking for consistency. They’re obviously looking for cost savings and they’re looking to ensure that they have available capacity when the market does inflect. And I think Intermodal is a great solution for all of that. And as Brian mentioned earlier, when inventory stabilize, there’s more of an opportunity to extend those transits, which also opens up more intermodal opportunities. So all of that leads to some of that shorter length of haul, which we’re seeing right now start to flip over.
Christyne McGarvey: Great. Thanks all. I appreciate it.
Phil Yeager: Thank you.
Operator: Thank you. Our next question comes from the line of David Zazula of Barclays. Your questions, please, David.
David Zazula: Hi. Good evening and thanks for taking my question. I guess real quick are you able to share the realized yield you were able to get in intermodal for the quarter?
Phil Yeager: Yes, it was down 21%. A couple of things to reference there was we had a fuel headwind as well as overlapping accessorial and over $5 million of surcharge revenue from last year. So I think along with that, I’ve mentioned earlier, you’re going to continue to see a little bit of a mix impact as we bring on more, shorter length of haul business. And that obviously impacted us in the fourth quarter as well.
David Zazula: Very helpful. I don’t want to pick too much at the scab that Brian had gone after, but just a little bit of understanding for us. On the way down, our perception was you held the line on price maybe a little too long, and it cost you on the volume side. Have you changed at all how you’re thinking about pricing or anything you’re looking at for pricing or algorithms or thing that will help you maybe be more – prevent you from being not aggressive enough, I guess, on the upside and not taking advantage of a rapidly moving pricing market?
