Operator: We have the next question coming from the line of Jack Atkins of Stephens. Your line is now open.
Jack Atkins: Okay, great. Thank you for the time. Really appreciate it guys. Good morning. So, I guess maybe kind of a macro question divided into two parts. I guess one for Joe, one for Rob. But I guess, as you sort of think about — on the industrial side, I think there’s a lot of concern about the potential for destocking of industrial inventories. Similar to what we’ve been seeing over the last nine months or so on the retail consumer side. I’d just be curious if your customers are telling you anything about the potential need to do that? And then I guess just following up on Scott’s question about capacity, given the pressure on small fleets, are you seeing any signs that capacity is exiting the market or maybe that capacity exit is accelerating in any way? I know that’s a long question but would just be curious about both those things.
Joe Beacom: Yes, I’ll start, Jack. I think yes just based on the FMCSA data and some of the stuff we’re reading, the net revocations of carrier authorities has really €“ it’s been like 6000 to 8000 a week for the last several weeks of 2022. And we’ve seen our approved carrier count decline as well into the first quarter. So I think you’re going to continue to see that. I think until some of the conditions I was just referring to with Scott kind of find a floor and start to see some level of consistency or predictability, whether it’s predominantly getting trucks fixed getting drivers the labor side of things and keeping their trucks healthy and again just feeling comfortable with where the environment is. I think you’re going to continue to see the larger market contract a little bit from a capacity standpoint and particularly in the small carrier realm, which is a lot of that one to 10 truck fleets.
Rob Brasher: And Jack, this is Rob. To address the destocking comment. That is not something that we’re experiencing or have in those conversations, again due to a lot of the constraints that have taken place over the last two years. We’re really starting to see a lot of the projects come back in the aerospace and the energy, automotive, government things of that nature. So where they couldn’t get supplies before or they couldn’t actually fulfill their projects or orders we’re starting to see those now come to fruition and continue going forward.
Jack Atkins: Okay. No that’s really helpful. And I guess Rob another question for you and Jim Gattoni, Jim Todd, sorry. No questions for you from me on the call today. But I guess Rob, I’d love to get your thoughts on Landstar Blue in 2023 sort of what’s the plan for that part of the business this year? And sort of I guess €“ as you think about that kind of as a springboard into 2024, what do you hope to accomplish to prepare that? I think we’re looking at that as a potential growth engine but would just be curious if you could maybe talk about what the plan is for Landstar Blue in 2023?
Rob Brasher: Yes absolutely. Landstar Blue is the volume growth mechanism. That’s what we’re there for. And we see this as a time of opportunity, because as I’m sure you’re hearing from others, companies are putting their freight out for it. Companies are looking for partnerships. They’re looking for solutions. Now a lot of the reasons why they’re doing it is in their mind is to drive rates down or get the rates back to where they were but it gives us an opportunity into lanes into places that we haven’t been into different sections of their business to continue to grow that. So we look at it as an opportunity. The more customers that we’re in front of talking about their supply chains, their needs in trying to provide solutions, I look at that as a benefit to that company.
Jim Gattoni: From an organizational standpoint I know Jack I had to jump in because I know you weren’t going to ask me a question. So I’m jumping in anyway. We are working like crazy, trying to get Rob all the automation into his systems for €“ to automate dispatch capacity stuff like that. So there’s I don’t want to say we are pulling €“ I don’t say we’re holding back on growth there but we’re doing it properly and we don’t want to disturb anybody supply chains until we get automated.
Jack Atkins: Okay. All right. That makes sense. Thanks again for the time and thoughts, guys. Appreciate it.
Operator: We have the next question coming from the line of Bruce Chan of Stifel. Your line is now open.
Bruce Chan: Hey, good morning, everyone. Appreciate the time here. Jim, Jim Gattoni, I guess maybe just a follow-up on that automation comment. You all talked about a lot of the new technology investments that you’re making and how that’s going to start to ramp down this year. Can you maybe just give us an update on what those are and as far as the automation how far you are along in that process and what the rollout looks like?
Jim Gattoni: We’re dealing in two different worlds. Once we started off Blue, Blue is right more contract dedicated lane type business and it requires a little bit of automated dispatch at all not that the agents can use that. And we’re kind of experimenting a Blue to build out tools for the agents. On the core side, which is the agent is, it took a good six or seven years to build out a TMS. And the TMS is really the order to delivery system that the agents use to put the orders in the dispatch a truck to monitor the €“ not the monitor but to just provide the transaction to a certain workflow. On top of that €“ so that’s one €“ that’s our biggest spend is building out that new TMS. So that’s the biggest part of the spend we’ve had over the last five or six years.
But we’ve attached a pricing tool too. We’ve attached a credit tool to it. Trailer — we’re rolling out a new trailer maintenance app to help the drivers identify — to more easy get trailers maintain more easily get trails maintained. Trailer request tools Clarity which is our visibility tool which is where you can — how we track freight. Those are all connected in, right? So they’re always separate components of technology that lead into the successful move of freight from point A to point B with the proper communications. All those are actually up and running over the last year or two when they’re starting — they’ve moved off of the sitting in our balance sheet as an asset and they’re starting to roll out. Now, since they’re rolled out we depreciate them.
So, all that stuff is very far along. The TMS is probably — it’s starting to roll out. The rollout is getting a lot quicker. I would say, it’s probably made 15% of our truckloads are in it, but we’re shooting for getting that ramped up this year. So most of the agents be on it. And when you speak to some of our agents in the first 90 days change is hard. So I don’t talk to a guy that has been it for 90 days, talk to the guy that has been in for 120 and you’ll get very favorable feedback on the efficiencies that are built into the way they do their business.
Bruce Chan: Okay. That’s great. Really appreciate all that color. And then maybe Rob, just one follow-up. You mentioned some of the glimmers of positivity on the flatbed side. We’ve heard some discussion on a few of the industrials conference calls about mega projects this year, whether that’s related to chips or Inflation Reduction Act. Just wanted to know, if you’re able to attribute any of that positivity on the unsided side to that project business there?
Rob Brasher: To the project business. Again, a lot of what I’ve seen is heavy equipment aerospace government. So, while any time that we want to talk about infrastructure, anytime we want to talk about that, I can’t directly say that we have an impact in that directly. But I can say that the people that feed those projects we have an impact with them. I don’t know, if I answered your question exactly the way you wanted. But I see it more from the manufacturing side than I do it from the actual project yourself side.
Jim Gattoni: Right, you’re seeing it from the supply chain, lower down the supply chain, the raw materials and the equipment going into those projects as opposed to the — we’re not getting hired by the person running the project. We’re getting hired by the supplier supplying the stuff in.
Bruce Chan: Got it. Fair enough. Appreciate it.
