So, these are all prior period claims that we’ve increased our reserves based on our experience. With that, I will tell you that the reason why we’ve done this is because our insurance claims costs for the claims experience is dramatically going up. And it’s a highly unpredictable environment. We are not planning in 2023 for another one-time charge. But as I said, it’s highly unpredictable and we’re continuing to watch our claims. Now, I will tell you that we have made some changes to our structure going into 2023. And so, we are going to be taking on more coverage and to contemplate this. And I’ll go even a little bit deeper than we normally do just because this is a significant area that we’re focused on. I think on a rate basis, our premiums are going to be up around 15% just on the core premiums.
But as I mentioned, we’re adding in new layers of insurance and so our premium base will also increase. That said, we’re expecting our incurred losses to increase as much as 30% to 35% in the next year because of what we’re seeing on these, just the movement today on how these claims are being settled. So, a little bit more insight than we would normally give, but wanted to give you a little bit deeper information on what we’re seeing in the insurance area.
Operator: We now turn to Brandon Oglenski from Barclays. Your line is open.
Brandon Oglenski: Hey, good morning and thanks for the question. Darren, I think you spoke a couple of times about earnings growth in Intermodal this year, can you just reconcile that with tougher pricing in the truckload market and how that dynamic could impact your yield generation this year? for specific items there either.
Darren Field: Well, I mean at the end of the day, we understand pricing pressure out there. Customers want to save money, but again, there is real cost to come out of our system and there’s real efficiency for us to gain with growth. And so, as we grow our intermodal business, there is the opportunity to continue to do more loads with the assets that we have. It may not translate into the same income per shipment, but if we’re executing more shipments as we move forward and find a way to drive some cost out, then we’re going to be able to grow our income really strongly as we grow volume. And that’s the mission, is to get out as this bid season goes and as we’re out communicating and displaying to our customers that velocity has improved and the intermodal service product has really improved a ton and can get closer in transit to what truck transit is. We feel like we can really grow our business significantly, which will turn into income growth as the year goes on.
Operator: We now turn to Allison Poliniak from Wells Fargo. Your line is open.
Allison Poliniak: Hi, good morning. Just want to get back to dedicating, I think this is probably applicable to the Final Mile as well. On the maintenance cost side, new equipment coming in, maybe less consumer demand need, should we think of that accelerating down pretty quickly this year or is it the customer needs are going to keep some of that aging equipment still in service? Just any kind of thoughts there.
John Kuhlow : Yes. Well, it kind of goes through all fleets, Intermodal, Dedicated and Final Mile. Talking to our OEMs, they’re still going to be constrained, they think this year. And so, we’ve publicly announced that we’re going to a third OEM that will help us alleviate some of those constraints, but based on our forecast, we will still be handling a few hundred trucks that are past due at the end of this year that could move forward if the OEMs numbers come up. But we will have some trades that we’re going to carry with us the most part of the year.
Operator: Our next question comes from Ken Hoexter from Bank of America. Your line is open.
