Robert Sanchez: Yes, I’ll let Steve give you some updates on the pipeline. I just tell you, in rental. I mean, Dedicated, as we mentioned in our earlier forecast, we are expecting it to be flattish. We’re seeing, certainly some cyclical headwinds from just a lot — on rates are pretty attractive. You’re seeing customers trying to take advantage of those. Availability of drivers is pretty soft. So you’re able to — companies aren’t struggling as they were just a couple of years ago to find drivers. So — but that is not unusual. It happens during the cycle. We feel confident that will come back. Around supply chain, I think it’s been more around the uncertainty in the economy. We’re seeing customers delaying decisions. So I’ll let — and again, I think that’s also economically cyclical and you’ll see some of that coming back. But Steve, why don’t you give some color around…
Steve Sensing: Yes. Justin, I’ll start with supply chain. I think if you look at the pipeline year-over-year, we’re relatively flat, as Robert said, just continued delays in decisions. Typically, it was about six months. Now we’re seeing that extend nine months plus. Lately, we have seen more delayed decisions, so either postponing or holding opportunities right now. So I really think it’s an economic outlook for the year for these customers, maybe making a network change later in the year. And then Dedicated, we did get a pop in the pipeline year-over-year. Some of that comes from the Cardinal acquisition. But the other balance is from our marketing campaign initiatives. Same kind of story there, delayed decisions, people taking advantage of price over service right now on the Dedicated side.
Justin Long: Okay. Got it. Thank you.
Robert Sanchez: Thanks, Justin.
Operator: We’ll now take a follow-up from Scott Group with Wolfe Research.
Scott Group: Hey, thanks for the follow-up. So you started to talk about the pre-buy coming maybe at some point next year, where do you expect to benefit? Is that — is it more leasing fleet growth? Is there any benefit to rental? Is it used pricing and gains? Where do you ultimately see the biggest benefit? It’s been a long time since you’ve had a big pre-buy?
Robert Sanchez: Yes. I think the answer is yes to all of those. If you go back to starting to date myself. If you go back to 2006, so 20 years ago, and the 2007 technology change was kind of similar to this one in that there was just a lot of cost increases with less operational benefits. We did see that level of pre-buy, a significant level of pre-buy, in late 2005 and in 2006. And it impacted, first of all, lease because it allows — basically, you have a lot more at bats. You got companies making decisions on — I’ve got to replace it to my fleet. What do I do? Do I buy or lease? It gives our lease sales opportunity to win some additional market. It helps our rental business because customers as they as they are waiting for new vehicles, they’re going to rent and also the attractiveness of those vehicles that are pre-2007 that are in rental goes up, certainly as an opportunity for rental to lease in the out years.
And then on the used vehicle side, certainly, the — and that will stretch out for multiple years to be residual — not the residual, but the sales price of those used pre-used 2027 vehicles, when they come into the used truck market should be helped significantly by the fact that they’re pre 2027. If I go back to the vehicles that we sold, that were in 2006, we sold those vehicles for a significant — significantly above our residual values at the time back in 2014 and 2015. So I would expect some of that to happen again through this cycle.
Scott Group: That’s helpful, Robert. And maybe just your other bigger picture perspective, you’re right, there’s this huge gap in fundamentals between what the trucking companies are saying and reporting and what the truck makers are saying and reporting. Maybe your thoughts on this disconnect? And what do you think it means for new truck pricing going forward?
Robert Sanchez: Yes. I think it boils down to — again, we’re not in the truckload business, but I think it pulls down to the spot rates, right? We manage a pretty significant book of truckload business for our customers in our Supply Chain Transportation Management business and truckload rates — spot rates have not recovered. They’re bumping along the bottom, still very painful for especially the larger truckload carriers. I think that’s just because we haven’t had enough supply of probably the smaller owner operators getting out yet. But this is — that part of the business is cyclical. It will come back up. It’s usual — I don’t know if it’s darkest before the dawn, but I think we’re getting there. It’s just a matter of when that happens.
Now in the meantime, the OEMs have come off of a pretty significant period of a large backlog. I think that the backlog has definitely come down. We’re seeing lead times for vehicles all have come in from where they work. And I think the OEMs are kind of managing that production now through this part of the cycle, and we feel pretty good about it. So they are seeing — they’re all looking at the significant increase that they should see in late 2025 and 2026, for prebuy. And I think are looking that is good for their industry and certainly for our business.
Scott Group: Make sense. Thank you, Robert.
Robert Sanchez: Thanks, Scott.
Operator: We will now take a follow-up from Brian Ossenbeck with JPMorgan.
