Scott Group: Thank you.
Robert Sanchez: Thanks Scott.
Operator: We’ll now take our next question from Brian Ossenbeck with JPMorgan.
Brian Ossenbeck: Yes, thanks. Good morning. Robert, just to a follow-up on the maintenance cost, obviously, a big line item. You’ve been focused on that, a lot in the past. Is this more a continuation of things that are structural improvements, pre-Cardinal and integrating that and getting leverage off of that? Or is this more of kind of like a cyclical — there’s more — more capacity in the system, and so it’s a little bit easier and the costs are coming down. It’s just deflation in general. How would you characterize that?
Robert Sanchez: Yes. I think it’s certainly the initiatives that we’ve been working on for multiple years. We’ve talked about every year. We have — we had the $100 million niche multi-year initiative. And then since that every year, we’ve got call it, $20 million, $30 million of initiatives. So we’re outperforming on some of those. Plus we’re getting some disinflation or less inflation, as you mentioned, around some of those costs. And that’s also helping us. So those are — I think those are structural. Those are likely to continue, certainly through the balance of the year.
Brian Ossenbeck: Okay. That’s helpful. And then just for the rest of the year, maybe you can talk a little bit through pricing and just how that’s coming through right now, you mentioned overcapacity. A bit on the rental side, utilization was a bit lower. How do you see the market in terms of staying disciplined and rational even though hasn’t quite recovered from a spot rate perspective on the leading indicator side? And then just same thing on leasing would be helpful if people are pushing those out to where if you’re finding still solutions for people who want to add or grow their lease book in this market? Thanks.
Robert Sanchez: Yes. That was a good question. On rental, we’re kind of flattish on rental pricing. There’s certainly some pressure out there with all the excess equipment, and we’ve kind of — we’ve been able to manage that pretty well in previous cycles, and we’re still holding out pretty well here. Around lease, certainly, you see a little bit more hesitation, customers wanting to — whether they’re not adding as much fleet certainly as they were a year or two ago. So we’re seeing a little bit of softness there. But as I mentioned, I expect still to have within our target growth of 2,000 to 4,000. And the pricing, the good thing about lease is that at the end of the day, you don’t buy a truck until you have a signed lease. So we still are able to maintain our pricing discipline and staying within that target spread range that we’ve talked about of the 100, 150 basis points.
Brian Ossenbeck: All right. Thank you, Robert.
Robert Sanchez: All right. Thanks, Brian.
Operator: We’ll now take our next question from Jeff Kauffman with Vertical Research Partners.
Jeff Kauffman: Thank you very much. Not to beat a dead horse, but I’m trying to figure out how to think about year end fleet numbers in rental and lease. And I guess based on what I’ve heard, down about 8% in rentals, so somewhere between 33,000, 34,000 units. And at least right now, 147,000 units, but that does include Cardinal. And if I take your 2,000 to 4,000, where does that kind of leave us the end of the year on the lease fleet? And then just kind of attached to that. As we’re deemphasizing tractors, and we’re focusing a little bit more on trucks and on trailers, is that creating a negative mix shift in the reported RPU?
Robert Sanchez: Well, let me just — on the lease side, Yes, I think you’ve got that right. We were originally about 13,000, including the 9,300, if you will, from Cardinal. So you added the 4,000 that got us to the 13,000, we’re going to be — we should be aligned to that. We’re probably going to be in that 11,000 to 12,000 range. It’s a little early. It’s still — a lot can happen for the balance of the year, we could beat that. But right now, that’s kind of what we were assuming for the balance of the year forecast. In terms of the pricing, what was the second half of your question?
Jeff Kauffman: Yes, it looks like the lease RPU was actually pretty decent. I would have inspected a little bit more of a negative mix drag, just based on how the component is changing. So kind of help me see through that?
Robert Sanchez: Yes. Some of that is certainly the newer equipment coming in. Remember, the big shift to trucks though is in rental, not as much in lease. So we’ve been making the shift to more straight trucks versus tractors has been on the rental fleet, less so on the lease fleet.
Jeff Kauffman: All right. And just to clarify your comments. So I should think of the lease fleet as being around this level for the remainder of the year in terms of total units?
Robert Sanchez: Well, it’s going to move up from this level, right? So we’ve added the – we’ve added the Cardinal unit and then we’re expecting to be up, call it, 2,000 to 3,000 units from there. So we’ll get about 150,000.
Jeff Kauffman: Okay. Beautiful. Thank you.
Operator: And we’ll take our next question from Justin Long with Stephens.
Justin Long: Thanks. I wanted to ask about the recent trend in both the Dedicated and Supply Chain backlogs. Just curious how the pipeline of activity has trended year-to-date, relative to what you were seeing last year? Robert, you made the point about secular tailwinds, but you also have cyclical headwinds. So I’m just curious how that’s netting out in terms of the pipeline for those businesses.
