We continue to do a lot of what I’ll call retail store rollouts, kind of big distributions to the big box retailers, some of our underlying customers that are vendors to those big box retailers. That business is, I wouldn’t say red hot, but it’s certainly still there and moving along nicely. We do a fair amount of work in kind of high-value servers, kind of the high tech space, and moving servers around, here in the U.S. and around the world for some of our accounts. That continues to do well. Our kind of humanitarian aid disaster relief continues to see opportunities, given what’s going on in the world environment. So those are some kind of areas or thematics that we observed within our own biz.
Kevin Gainey: Yes. That all sounds really good. Maybe you can also, at least what we’ve heard is there’s been a lot more pushback from a pricing standpoint, at least in the entire transportation industry. And I’m wondering if you guys are encountering that as well, when it comes to your service offerings, that people are pushing back on pricing.
Bohn Crain: Well, I think, for the benefit of the listeners, I think what you’re describing is we’ve been in an environment where kind of the pendulum of power has shifted to the customer, and they’ve been kind of doing their best to extract the best pricing they can out of the carrier base. But I think the pushback is coming is that they’re just effectively nothing left to give from the asset-based guys. And to kind of build on that concept a little bit further, as a non-asset base, as a principally non-asset based 3PL, when the asset-based guys have excess capacity sitting idle, they effectively begin to offer service at irrational, unsustainable pricing because they’ve got some cost and they would rather keep their fleets rolling than sitting idle.
And so that environment is a very tough environment for everybody, but including the non-asset based guys because the asset-based carriers are effectively taking as much freight as they can. And so there’s not as much left over to enjoy, if you will, for the non-asset-based players. But if we look at that over time, the kind of this window in the freight cycle is a very small window in time within what I would call a normal rate cycle. And you hear a lot of people talking about an elongated recovery because this window is taking longer than usual to kind of work its way through. And that, there’s obviously a lot of contributing factors. But when COVID and, was going on and there was such rich margins to be enjoyed by the transports, everyone out, was out investing in capacity.
But, and then so we know what kind of happens at the end of that movie or in the kind of the down part of that cycle, which we’re working through now.
Todd Macomber: Yes. I’ll echo that. I mean, we’re seeing increases in domestic international incrementally per quarter. And with those, I’m looking specifically at our net margins, it’s volume. The volumes are starting to pick up. And at some point in time, obviously, we’ll get back to more of that equilibrium and that whole, the scenario that Bohn’s describing will obviously be behind us. So it’s, I’m thinking that’ll change in, hopefully, next quarter, here, this quarter we’re in. And the dynamics of what you’re discussing, I think, will be back to a more normal healthy environment for everyone.
Operator: And our next question comes from Jason Seidl from TD Cowen.
Jason Seidl: So I wanted to sort of get an idea about 4Q, given just how slow 3Q started. Can you sort of walk us through EBITDA per month so we can get a better feel of what the run rate is as we head into the quarter here?
Todd Macomber: No. We’re not going to get that granular in terms of the deep, of our numbers. I think that would be problematic in terms of just disclosures. And I don’t have to turn around issue an 8-K on the back side on this call.
Jason Seidl: All right. So let me ask you this. So were you guys profitable on an EBITDA basis in January?
Todd Macomber: Yes.
Jason Seidl: Okay. That’s fair enough. Also, how should we think about the current mix between sort of your international air business and your more domestic stuff versus, and your ocean as well? I’m just curious where you guys ended the quarter on a mix basis.
Bohn Crain: I’ll let Todd hop in because I’m painting with a broad brush. But historically, our core business is a domestic time-definite freight forward. So again, painting with a really broad brush. If we’re normally a $1 billion revenue company, maybe $350 million or $400 million might be international. And then we could kind of peel that apart between air and ocean. But the bigger piece of the pie is on domestic. And when I say domestic, I’m including North America. So I’m including our Canadian business and Canadian cross-border and our Mexico and Mexico cross-border business is kind of domestic. And the international being true international, air and ocean, kind of coming to North America.
Jason Seidl: Todd, were you going to have a…
Bohn Crain: Historically, yes, have a go. So what, I don’t know if you want to kind of peel that apart a literally further.
Todd Macomber: I agree with what you’re saying, so.
Bohn Crain: Jason, I’ll build on it just a little bit more for you. So on the, certainly, historically, we were, as we thought about international, we were much more airfreight than ocean freight. And then during COVID, we ended up doing a fair amount of ocean, kind of during the peaks of COVID, given all the constraints and everyone looking for space. So that was a little bit anomalous, kind of the spike in ocean kind of during the height of COVID. But you would expect us to be more heavily leaning towards airfreight than ocean freight in terms of margin contribution.
Jason Seidl: Okay. So as I think about the additional capacity coming on in the ocean space, you guys are going to be less impacted than your typical freight forwarder might be?
Bohn Crain: Certainly, because well, I think the answer to that is yes. Because most people, when they say freight forwarder, they think international freight forwarding. And again, the majority of our business is actually on the domestic part.
Jason Seidl: Okay. I just want to make sure we’re thinking about the right…
Todd Macomber: I mean, historically, our gross margins, 65% of it, if you go back to the prior year, was domestic. So that’s the, and that will continue to be, we’ll have, it’ll be absolute the majority, the vast majority of our net margins.
Jason Seidl: Perfect. And Bohn, as I, you talked a little bit about usage of cash, and I understand that it’s going to be spread out depending upon where the market is. But at least for the near term, should we expect you guys to sort of just stay in that buyback and agent tuck-in mode? Because right now, given where your stock is trading, it might be just difficult to do any sort of other outside transaction for the multiple type?
