Operator: Your next question comes from the line of Tom Wadewitz from UBS Financial. Please go ahead. Your line is open.
Tom Wadewitz: Yes, good afternoon. I wanted to ask you a little bit about Intermodal margin in the fourth quarter. If we take out the insurance, you saw about 80 basis points of sequential improvement in Intermodal margin. And I just wanted to see if you could give a sense of what drove that? Was that less repositioning expense? Was that something helpful on the revenue side? It didn’t sound like there is a change on price. And then, I guess, related to that, when you have a longer length of haul and some favorable mix, does that affect you, like price? Does that help the margin a bit? So, really just a couple of things on Intermodal margin. Thank you.
John Roberts: Well, I think that certainly the fixed costs that we’re carrying is material. And we highlighted that at least for the fourth-quarter, the coiled spring unlocked a little bit and we were able to spread growth volume over more loads and that’s certainly was a contributing factor behind that. No, there certainly was not a price improvement during the quarter. Pricing will continue to be and forever will be the fastest way to repair margin. But certainly volume in our current state is worth more to us than it ever has been in our past given the asset count that we currently own. And so volume is worth more than it used to be and certainly in the fourth quarter was able to show that.
Operator: Your next question comes from the line of Brian Ossenbeck from J.P. Morgan. Please go ahead. Your line is open.
Brian Ossenbeck: Hey, thanks for taking the question. I know you don’t want to talk about rates given all the uncertainty at this point, but maybe you can talk more about just the conversations with the shippers. Some of that momentum and that surprise upside in the fourth-quarter, is that really carried into the conversations as they unfold here? Are they looking for longer durations? Are they looking for back-half locking in some capacity? Darren, would love to hear if there’s actual truckload conversion that’s happening. And then maybe, Brad, you can just give us a sense in terms of what you see in the truck market itself from a capacity spot rate improvement, what do you expect here standing in the first part of the year looking to the rest of it? Thank you.
Darren Field: Okay. This is Darren. I’ll start and just — and then hand it off to Brad. I think that from a pricing conversation perspective, it’s really the wide variety of results there in terms of I think there is universal acknowledgment for our service performance and we feel good about that. There is universal hesitancy to offer rate increases and competition is real. There is competition out there and that will always be a factor. Our customers are under tremendous pressure not to have their costs go up, and so that’s going to be a factor as we — but at the same time, we really — we’re not far enough into these conversations to be able to make heads or tails of it. There’s a lot of work to be done. I think that I’m proud of the way that customers are responding to the quality of our service and we’re going to lean in on that.
Brad Hicks: Yes. Brian, I would just add — this is Brad Hicks. Similar to what Darren said, it’s really way too early in the bid cycle to see what’s ahead of us there. But at least from our perspective, from a trucker standpoint, rates have to go up and I can’t tell you exactly when that’s going to happen, but the cost, the inflation, when we look at the operating cost of not just our own fleet, the fleets in general and we’re rates plummeted in the Truckload space, which are down more than 2 times what they were in terms of a percent reduction than we see in Intermodal over the last 12 or 14 months, something is going to have to give there. We obviously pay real close attention on what’s going on with Truckload capacity and we do start to see exits in the marketplace there.
And at some point, that’s going to have to inflect. We’d like that to be sooner than later. As Darren mentioned, customers are still under tremendous pressure. They are just not going to give it to you, but I do feel like something will turn at some point. It’s a matter of if not when. And so that’s how I would respond.
Operator: Your next question comes from the line of Bruce Chan from Stifel. Please go ahead, your line is open.
Bruce Chan: Hey, thanks, operator. Brad Hicks, maybe just sticking with you here on the ICS side. I noticed that sequential gap down in the contractual business percentage, I was just wondering if that’s due to maybe capturing some seasonal spot opportunity. Was that more of a function of the mix from BNSF or was that a function of the calling that you’re talking about? And then maybe just thinking through profitability in the segment, do you expect the acquisition and integration cost to kind of moderate this quarter, are we still working through some of those?
Brad Hicks: Can you repeat the very first part of your question, if you don’t mind?
Bruce Chan: No, not at all. Just looking at that move down in the contractual business percentage to I think it was 59%. Is that seasonal spot opportunity? Was that BNSF mix? Or was that some of the calling that you’ve been doing?
Brad Hicks: Great. Okay. Thank you. Well, first, let me correct, when I ended the last question, all I said, if not when, it’s when not if. Sorry, I was getting ahead of myself there. But, we saw that come in right around 59% contract, a little bit lower than what we had been. Certainly, the mix of business that we saw come through in the over-the-road assets of the BNSF acquisition, that did play a factor. I think that as we move forward, as you look at our history, largely, we like to be in that 50/50. There is times where that swings higher on contract or published. We got overweighted during the pandemic, if you recall, on spot when we were greater than 50% spot. So, the sweet spot would be for us deliver that 50% to 60%, so I’d like to think that that’s going to maintain.
But we’re also going to need to see the spot market — overall demand in spot market pickup. It still is relatively soft in that category. Compliance is very high amongst shipper tenders. In terms of carriers accepting tender acceptance and so, we’re going to be real close attention as we move deeper in the year. Do believe that you are likely to see — when we do see the flip, you will start to see spot opportunities grow and we’ll be poised to take advantage of that.
Operator: Your next question comes from the line of David Vernon from Bernstein. Please go ahead, your line is open.
David Vernon: Hey, good afternoon. A quick clarification and then a question on the insurance stuff. So, Shelley, I think you talked about growing Dedicated EBIT maybe being challenging. Were you referring to like the GAAP EBIT number or the adjusted EBIT number? And then the real question I have for you is, John, I appreciate your comments on insurance being a recurring thing. But John Kuhlow, if we would look at what we did in terms of the $53 million going into reserves, however you change the premiums and the limits on the policies. If 2023 happened exactly as it happened this year in terms of incidents and payouts, flash forward to 2024, if that just repeats, in 2024, are we taking another charge or are we not taking another charge? Thanks.
