Jason Seidl : Yeah, that make sense.
Jim Gattoni : And the level of available capacity.
Jason Seidl : My final one here is you’re talking about your expectations are now pushed out to the summer of 2024 to see any type of inflection. Should we assume that the inflection on year-end will come first on the dry van side and then maybe followed by your platform? Or do you think they’re going to sort of roll together.
Jim Gattoni : Well, two completely different dynamics, right? One is more consumer driven. One is more manufacturing U.S. type machinery and stuff like that. So I would say that my expectation really would be — the consumer side, it’s — there’s more volume there. There’s a heck of a lot more volume within the U.S. on the van side and consumer can drive that up or down. And a lot of the capacity that comes out of the market is van capacity. The flat bit guys kind of chug along. They’re used to having ups and downs and spikes in the environment. So I would say that I think I’d be watching it more on the van side. The other thing too is about the flatbed side. It’s relatively inconsistent, right, whether we’re doing heavy haul or we’re doing regular flatbed.
The industry is a lot more diverse. Is it lumber? Is it — and what kind of — what end markets are you delivering on the flatbed side as opposed to the consumer? So that actually travels a little bit different than van. Van has got a little more consistency in the cycle.
Jason Seidl : Jim, I appreciate the time as always.
Jim Gattoni : Yeah.
Operator: Thank you. We have the next question coming from the line of Jack Atkins of Stephens. Your line is now open.
Jack Atkins : Okay, great. Good morning, guys. Thanks for taking my questions. So I guess, Jim, I wanted to go back to the guidance for a minute. Just so we’ve got a clear understanding of it. I mean if I understand what you’re saying correctly, the thought is that we’re going to have sub-seasonal volume performance in the fourth quarter, I think fairly significantly sub-seasonal, but the revenue per load trends are kind of more in line with normal seasonality. And I guess, so much of the fourth quarter typical quote unquote seasonality weighted to later in the quarter, if volumes are that sub-seasonal, wouldn’t revenue per load be sub-seasonal? Or is there — do you think we’re kind of decoupling at this point based on the earlier commentary around contract versus spot?
Jim Gattoni : It’s all based on what’s jumping out from third quarter into October. We’re seeing relatively look a little more favorable as the first three weeks of October. So we’re just carrying that forward so if you take that October number where we think October is coming out, and yet trended seasonally, the quarter will be over — will be sequentially better than expected, right? So it’s really because we’re starting at a higher jump-up point heading into the quarter. That’s how we got there.
Jack Atkins : Okay. All right. I got that. Makes sense. Maybe just a quick follow-up on the guide for a moment. But in terms of like Jim, Todd, maybe this is for you, but can you maybe give us a thought on 4Q G&A and maybe the gross margin or net revenue margin that you’re assuming in the fourth quarter just within the guide?
Jim Todd : Yeah, hey, Jeff. So given the step down at the midpoint for revenue, we’re looking at 14.5 to 14.7 on VC and the majority of the good guy there is assumed mix. On the G&A side, pretty consistent, of course, insurance being — we’re utilizing 5.5% there for the guide versus a 5.8% actual in the third quarter. But your other lines are fairly stable sequentially.
Jack Atkins : Okay. Great. And I guess maybe just as last question here, kind of more bigger picture, but you guys are the first what I would call either truck broker or logistics provider to report so far. And we’ve had a lot of news here in the last couple of weeks around some of your high-flying competitors facing some financial difficulties, one of which has closed. I guess, Jim Gattoni, I’d love to get your thoughts on maybe how you’re seeing longer term the landscape within the brokerage market, maybe evolving year with higher interest rates and higher cost of capital? How do you think that’s going to affect the competitive landscape longer term, not shorter term but longer term?
Jim Gattoni : Well, in a light asset business model that I believe one of the ones you’re talking about was a light asset business model that shut at stores or at least temporarily shut its stores. Cost of capital for us is really how it affects the — and interest rates really has affected demand in the economy more than affects us, our financial results, right? So we look at it more that way and where we think that’s going to take the economy and the brokerage model. The digital freight matching or the digital freight brokers, look, look, their tools were working. It’s just — I don’t know what happened to the business model in that one scenario where they closed. We did see a couple of — we got a couple of loads from when they shut the doors.
There were some freight coming over. I’m not sure that’s going to be long term for us. We didn’t build anything into the fourth quarter. But long term, on brokerage, it’s just the service isn’t going to change. The shippers are looking for high-quality service, on-time delivery, like we’ve been preaching for the last five or seven years. We — I’ve always said that anybody can build an app, it’s the way you execute with it. And we’ve been executing with technology since 1999. We are posting boards to some website where the spouses of the drivers were sitting home and calling up, right? So we’ve been on that. I think there’s a viable business out there when it comes to digital, but I think you need the human factor behind it. So it’s just to us, another competitor into the broker space that we think we compete better than anybody against those start-ups with the human factor that we have geographically dispersed field throughout the U.S. Long term, I don’t see this industry changing much.
You talk about AI and stuff like that. It’s — what we do — what we get paid to do is move freight from point A to point B, right? And your build efficiencies around that by improving your communication flow, the accuracy of data, the speed of sharing information and visibility. That’s what it is, whether it’s AI, back-office systems or stuff like that. So I don’t see a significant change as it relates to technology going forward on the broker side, when truck brokers or the cycle, the way the cycle works out. I don’t see anything disrupting that.
Jack Atkins : Okay, really appreciate the thoughts. Thanks, guys.
Operator: We have the next question coming from Stephanie Moore of Jefferies. Your line is now open.
Stephanie Moore: Hi, good morning. Thank you for the question. I wanted to touch a little bit again on maybe the BCO count coming down, continuing in the third quarter. I think we’re kind of at a multiyear low here. And we love to — I know you provided a little bit of commentary in your prepared remarks. But — maybe if you could touch a little bit about do you think that this is kind of signaling we’re at the bottom here? Do you think it could kind of take a leg down further? And then maybe just for context, maybe if you wanted to provide some color on just how BCO utilization has trended in the third quarter and kind of into October.
