In terms of the competition, I’ll tell you, yes, as you saw, Dedicated, especially in Dedicated, you’ve seen our growth rate in Dedicated has slowed down. Sales have softened. We’re not seeing the same level of private fleet conversion, if you will, that we saw last year. And that’s primarily because you’ve got a very attractive spot rate. So you got customers who are taking advantage of that. And you have the driver recruiting market has gotten much easier also. And therefore, not as many private fleets needing help there. That is a temporary — I believe that’s a temporary reprieve because the driver shortage is here to stay. And we’re going to — I expect that as the freight market comes back, you’re going to see the driver shortage really exacerbate itself again and come back up, which will drive a lot more Dedicated.
But in terms of competition, look, we are very disciplined around our pricing. So you’re not going to see us get very too aggressive on pricing in order to win deals. We’re going to win the deals where we can add value and the customers are willing to pay for that. And that’s why you see that the profitability of our Dedicated business still remains strong.
Brian Ossenbeck: Thanks, Robert. Probably helpful. Appreciate it.
Robert Sanchez: Thanks, Brian.
Operator: We will go next to Justin Long with Stephens.
Brady Lierz: Thanks. Good morning everyone. This is Brady Lierz on for Justin Long. I wanted to ask about the monthly rental trends through the quarter, including how you’ve seen October trend month-to-date and maybe your expectations for utilization and rental for both the fourth quarter and early next year?
Robert Sanchez: Yes, I’ll hand that over to Tom to give you what we’ve seen in the months, but I will remind you that we talked about it on the — in the script on the call. We have brought — in the quarter, we brought down actually, year-over-year, we brought down our tractor fleet in rental by 18%. That was really to match what we were seeing on the demand side. So one of the things that we’re really proud of is from an asset management standpoint, we’ve been able to really adjust our fleet very quickly to be able to match the demand we’re seeing. So as we go into next works — I mean as we go into this quarter, we’re expecting continued softness in rental. But I’ll let Tom give you a little bit of color. We are expecting some pickup in utilization in the last couple of months as we get into the holiday season. Go ahead, Tom.
Tom Havens: Yes. Thank you, Robert. And yes, we did mention it earlier, but the demand was a little bit softer than what we expected and forecasted in Q3. So we did continue to kind of throttle the redeployment process and our asset management team has done a great job in executing that. We had — we’ve done year-to-date a little over 3,000 rental-to-lease redeployments, which has helped us move that fleet down. We weren’t necessarily expecting to need to do that much in Q3. But as we saw the demand really not be there as we forecasted, we continue to move the fleet down. So we do expect that softer demand to continue into Q4 which was different than our original forecast. Heading here into October, the numbers are — the utilization is right in line with where we expected it to be, right in the mid-70s, right around 75%, kind of flat to what we saw in Q3.
Although we do expect a slight seasonal pickup in November and December, maybe a pickup that seasonally is a little bit lower than what we’ve seen historically. So that’s currently what’s in the forecast. We do expect the fleet to come down again, I think sequentially, we’ve got the rental fleet coming down about another 1,000 units to end the year.
Brady Lierz: Okay, great. Thanks for the color guys.
Operator: We’ll go next to Brian Ossenbeck with JPMorgan.
Brian Ossenbeck: Hey, thanks. Just a couple of quick housekeeping, I guess. Robert, maybe the impact of the UAW strike is still dynamic and ongoing. But have you seen anything — yes, you mentioned ground count was maybe getting little away a little bit. But anything from your perspective to keep in mind into the fourth quarter. And then maybe you could just give a quick high-level view of IFS acquisition is still pending, but what are you hoping to get from their types of cross-selling, how the customers are reacting to that? And I guess, on the contract manufacturing side, this — should we look at this as a margin accretive to supply chain? Or is it sort of in line with the segment? Thanks.
Robert Sanchez: Okay. Thank you, Brian, for the question. First around the UAW, the impact so far has been immaterial. As you know, as I just earlier mentioned, that about 27% of our supply chain business is automotive, it is an important part of our business. But we have a pretty good balance between union and non-union end customers. So as we go into the balance of the quarter, we’ve built some of that — what we expect might happen in there. But I think even if you look at even in the worst case scenario, we have probably covered within the estimate that we’ve given you. So I guess, less of a big concern for us right now. Then under — for the IFS, we are very excited about the opportunity here. So I’m going to let Steve give you a little bit of color on IFS and how it fits into our Supply Chain portfolio.
Steve Sensing: Thanks, Robert. Yes, Brian, really excited about IFS. I would think of it as an on-ramp for our customers. So we do this in just a few locations in our warehouse today but this is additive to the pipeline. So there is a pretty good sized pipeline in their portfolio that we are — we do not participate in today. So we think that’s very exciting. It does fit into our port-to-door strategy. As you think about this business, it is complex and it is sticky with those customer relationships. So that’s attractive to us. Again, 15 locations across the U.S., nine are multiclient, which we can serve small start-up companies and large companies that have run out of capacity and then six Dedicated customer operations, so almost 4 million square feet. We would like to welcome the team. A team of about 1,000 employees will join Ryder here in the next few weeks and really excited about meeting them and getting them as part of Ryder.
Robert Sanchez: Yes. Brian, the only other thing I’d add to it is accretive to our results going into next year, somewhat accretive. And then from a margin standpoint, I would say, is in line with our supply chain margins longer term.
Brian Ossenbeck: Okay, great. I appreciate all that. Thanks guys.
Operator: At this time, there are no additional questions. I’d like to turn the call back over to Mr. Robert Sanchez for closing remarks.
Robert Sanchez: Okay. Well, thank you, everyone. Thanks for the questions and your interest in Ryder and look forward to seeing you as we get out on the road. Thank you. Be safe.
Operator: This does conclude today’s conference. We thank you for your participation.
