Scott Group: Hey, thanks. Good morning. So just maybe a bigger picture question. Adam, someone asked about pricing earlier, and you answered, well, based on normal seasonality, here’s what yields would look like. And I would have thought maybe with this big Yellow event that maybe would be better than normal seasonality on pricing. And same thing, right, where Yellow has gone and tonnage is still down. And so I guess, ultimate question is we all treated Yellow as this really, really big event in the industry. Is it not really a big event? Or is it that – it’s a really big deal, but it’s all being masked by slow macro and ultimately, whenever the macro gets better, we’ll really feel the impact of Yellow and it’s all still sort of on the come?
Adam Satterfield: Yes, I certainly think it’s – the macro being in the state that it is, that helped the carriers absorb the freight that they were hauling before and pretty effectively. And – but like I mentioned, I think some of that freight has gone into some different modes and believe that, that will be short lived until really demand improves overall for transportation in general. But – now when it comes to pricing and just the yield improvement that we’ve had, we have incredibly strong yield performance in 2021, followed that up with 2022. And then our rev per hundredweight ex-fuel was up 8.1% this year. So some of that, like I mentioned, has been mix driven, but we’ve had really strong yield performance really over the last three years.
But we’ve said even during that time, that our strategy is what it is. And we think it has worked for us. And when we operate at 72% for the year, I don’t know that anyone else will be anywhere close to that. And so – but it’s just a disciplined focus of keeping our costs as low as we can, and then pricing, understanding our cost on a per customer basis and then having a yield that makes sense to try to constantly improve the profitability on each customer account. But we’ve never said that, that was the right long-term rate. We just want to be consistent and be fair with our customers in that 100 basis points to 150 basis points positive spread of yield above cost has worked for us. But we were in a much different position than a lot of other carriers, I think, in terms of that long-term consistency that we’ve had in our pricing, we didn’t have the same need to go out and try to take advantage of that market change and really increase rates in any way.
We kept the same measured, fair approach. And I think that pays dividends. I think it is a reason why we’ve had good volume stability as well when we’ve gone through this last slow period, is that we’ve got good customer relationships. Freight at the end of the day is a relationship business, and so we want to continue to strengthen relationships and we’ve got an understanding with our customer base in terms of what we’re trying to achieve. And you work through a slow year, we really didn’t have any major customer losses. We didn’t lose lanes from customers. We kept most of our large national accounts as we progress through the year, just the volume weakness was a result of – there were reduced orders for our customers’ products. So pleased with the customer retention that we had last year and look forward to demand improves for our customers’ products, we’re in place and we’ll be able to bring on that freight into the truck line.
And get back to doing what we do best, which is growth.
Scott Group: That’s helpful. I know we’re past here. If I can just sneak in one more. I’m just looking at this like, 2022, you guys bought back a lot of stock at the lows and your pace of buybacks have really slowed the last couple of quarters, sort of with the stock at the high. So you’ve had a pretty good feel for your stock. How are you thinking about your buyback this year?
Adam Satterfield: Well, we’ll have the same approach that we always do. We start looking at what we think our cash from operations will be and then what we’re going to spend with capital expenditures. And then we have the fixed dividend component. And the net cash balance, we target trying to return to shareholders through the buyback program. But we generally have a grid-based approach where we’re buying more when the stock is lower, and I mean, less when it’s higher, but consistently in the market. And I think that’s what you’ve seen. But that $1.3 billion was double what we spent, about $600 million the year prior. And so it was reduced this year in the back half, in particular. But as we go into 2024, we’ll just continue to look at how much free cash we think that we’ll have and how much we try to return to shareholders and in what ways as we go through the year such that we don’t obviously want too much cash building up on the balance sheet.
But it’s all about driving returns on invested capital, and we’ve done a pretty good job over time, with improving that metric.
Scott Group: Thank you, Adam.
Adam Satterfield: Thanks, Scott.
Operator: Thank you. Today’s last question comes from James Monigan with Wells Fargo. Please go ahead.
