Jason Seidl: So I know you weren’t giving exact guidance for the remainder of the year. But I guess given some of the gains that you guys have seen with US X and I guess, a gradual improvement in the marketplace, how confident are you that you’re going to be able to grow earnings in the back half of the year, excluding insurance? And then I guess just real quick, what percent of your book of business gets repriced in the truckload section on a quarterly basis?
David Jackson: Yes. Well, Jason, I appreciate the question. And I would say that if we really felt if we felt like we had a really good read to speak on the second half, we would have done that through our guidance. So for now, we’re just going to stop with what we’ve given for the first 2 quarters in terms of guidance. Now clearly, what you see is you see a range in the second quarter that’s better than the first quarter. And so it would be safe to assume that we don’t see we’re not expecting a big drop off. We think the worst is behind us, but that’s as far as I think we would feel comfortable to talk about that right now. As for what percentage of our business might turn over, I think with technology, it’s rather easy for many of our customers to do what we call mini bids, which is in essence, they fire off an electronic request for us to bid on a handful of lanes.
And so we are bidding on freight every single week of the year. Now the majority of the network bids, if you will, is a, call it, mid to late November through call it, April with these awards largely materializing before the end of the second quarter. It used to be like everybody fit in a pretty tight window there. And today, again, I think technology is a factor in that. It’s not such an undertaking for them. It’s kind of spread out. So I hope that helps. I hope that gives you a bit of a sense. So the majority of our incumbent business will be repriced over the first six months of the year.
Jason Seidl: No. No. That’s helpful. And has the duration of the contracts changed any? Or have the shippers been pushing for longer contracts?
David Jackson: It depends on who feels like they have leverage in the market. And usually, they’re agreed to for a certain amount of time. I will tell you that there are some shippers that are pulling forward bids that they normally would do later in the year, and they’re pulling them from, call it, June to February. You can guess maybe what their motivation might be to do or might drive that. And it sure seems like our customers expect that rates are going to be up in the second half of the year. That’s what the behavior is showing us. So it sometimes can that sometimes can change, Jason, is what I’m saying.
Jason Seidl: Understood. Appreciate the time, as always.
Operator: And your next question comes from the line of Jeff Kauffman from Vertical Research. Please go ahead.
Jeff Kauffman : Thank you very much. Two quick questions. A little more number detail, big jump in insurance costs this quarter. Could you talk a little bit about what went on, on the insurance? Is this related to what happened in non-reportable? Is this something different? But it looks like that was up something in the neighborhood of almost $36 million, $40 million this quarter.
Adam Miller: Yes. So Jeff, that — you’re right. I mean that’s related to the insurance business and the decision to exit that and just to try to fully accrue the claims that we have outstanding in this business, so we can run them out without seeing much of an impact in the 2024 results. So that would be the largest driving factor.
Jeff Kauffman: All right. Can you help us understand that? I know you said you’re going to be exited from the business at the end of 1Q. So was this 71 really a bit of a forward-looking charge where we’re accruing liabilities and after 1Q, is that going to be all we’re going to hear from insurance business? Or there are going to be some legs that occur after that even though you’ve exited the business and have kind of closed that out.
Adam Miller: Yes. You can’t look forward liabilities. And so I think we looked at the claims development and how that had been growing over time. and took a more conservative approach at reviewing the potential growth and inner of the book of business, and that led to a higher accrual that we believe will actively reflects what exposure we have today. We’ll have — because we have to give certain notice to the insures before we can cancel policy, there is this runout period. We have reduced exposure greatly already. And so I think there’s pretty limited financial impact we’d expect in Q1. And then it’s essentially running out the claims and closing out the outstanding liabilities over the next probably year or 2.
Jeff Kauffman: Okay. And then just one last clarification on that. So if I look at this as an unusual event, making a decision to exit a business, and I want to try to segregate that from the operating activities of the business in the fourth quarter. What would that split of the $71.7 million being?
Adam Miller: Maybe I didn’t understand the question.
David Jackson: How much would have maybe been tied to maybe a receivable or insurance or a software versus the claims? Is that what you…?
Adam Miller: Is that what you’re asking, Jeff?
Jeff Kauffman: I’m asking if we did not exit the business, what would that $71.7 million would look like operating wise in the quarter.
Adam Miller: Yes. We don’t have that. We haven’t differentiated. Yes.
Jeff Kauffman: All right. Gentlemen, thank you.
Operator: And your next question comes from the line of Chris Wetherbee from Citi Group. Please go ahead.
