Jim Todd: Yes. So, Scott, I would tell you that pre-pandemic the inflationary pressures were really isolated on the insurance line and the tech line, whereas post-pandemic, we’ve got wage — two years in a row of huge wage inflation. The benefits inflation on that line is a little heavier. And then, I think, 2019, the comp under variable program snapped to like $4 million.
Jim Gattoni: It was very low.
Jim Todd: It was very low. And we’ve got some recent equity tranches that are based on lower base years, like, 2020 for example. So we’re not going to get as much of a — we’ll get softening, but we won’t get as much of a softening on those lines 2018 versus 2019 and 2022 into 2023.
Jim Gattoni: The other piece is not just SG&A. It’s — I believe that the insurance line was $70-something million and we’re running $125 million right now. So there’s $50 million of pressure right there from 2019 into 2023. That’s a big piece.
Scott Group: Jim, I know, you guys did the dividends. I didn’t see any buybacks. What’s the thought on buyback this year?
Jim Gattoni: I — this year, we’re going to continue to buy back. It’s our favorite thing to do here other than work. But our thing is, we didn’t buy back in the fourth quarter, because we watched the stock run up. I think we ended the third quarter at about — I think the stock was trading like in 145. And we don’t compete with buyers by the time — by the time the window open and — by the time we got to the end of the quarter it went up to 160 – 170. So that’s really why we didn’t get in. We’re just waiting for it to settle. Look, if it stays in the range that it’s at today and we see some stability in pricing and volumes over the next couple of months we’d be in. I mean, it’s the same thing. We’d be opportunistic stabilize — see the stabilized price and see the market stabilize a little bit.
I think we’re a little too early into the first quarter to determine whether we’re going to see the stabilization in rates that we see currently and whether we’re not confident in the volume trends we got to get through February. February is such a tough comp. It was our best month last year. And so we’re watching all those signs, but we haven’t changed our thought process on buybacks. We favor them.
Scott Group: Okay. And then just last thing, I may have missed some sort of comments you made about profitability on contractual over spot right now. I haven’t heard you talk about it that way before. If you could just expand on that because I think I missed it.
Jim Gattoni: We don’t — like most of — blue is so small. Blue is doing most of the contract work, but it’s pretty small. So we don’t really have much data on the comparisons there. But with us it’s the profitability. We don’t really have a lot of contract dedicated freight out of the agent base at the core. I mean, they run some of it, but it’s still — even in our world contract rates are almost like spot rates right? If the shippers — if we’re running something that looks like a contract run like lanes and rates start dropping the shipper comes back to us and drops our rates. So we have contract rates. They just don’t hold. So our whole world almost works in the spot world other than the little piece over at blue. I think the question was we’re trying to figure out where our spot rates today as compared to contract rates.
And I don’t think we had a very good answer because I don’t think we know where they stand today. We get the data just like you get it from people who publish it.
Scott Group: Okay. Thank you, guys. Appreciate it.
Jim Gattoni: Yes.
Operator: At this time, I show no further questions. I would like to turn the call back over to you sir for closing remarks.
Jim Gattoni: Thank you. Before I sign off on 2022, I want to thank all of Landstar’s agents BCOs and employees for putting up another record year. The people in Landstar’s unique network of agents, capacity price employees or what truly sets Landstar apart in our industry and enables the success we all achieved together. Thank you and I look forward to speaking with you again on our 2023 first quarter earnings conference call currently scheduled for April 27. Have a good day.
Operator: Thank you for joining the conference call today. Have a good morning. Please disconnect your lines at this time.
