Schneider National, Inc. (NYSE:SNDR) Q2 2023 Earnings Call Transcript

Could that change in the future? Possibly, but we don’t have visibility to any of that at this point in time. So this is our plan to behave as we look forward across the remainder of this year.

Operator: The next question comes from Ken Hoexter with Bank of America.

Kenneth Hoexter : Congrats on another acquisition, and it’s getting closer. So a lot of talk here on imports, exports. Looking at the — I guess your target now $0.38 to $0.45 if you just divide it in the second half per quarter, down from $0.45 to $0.55 in the first half, Mark, I just want to clarify, is that really just pricing? It sounded like you were saying utilization is okay. You’ve added a dedicated fleet, but no contribution at least right now, right? Does that mean higher margin on the added fleet? Maybe just talk about — I don’t know if Steve wants to chime in on highs, lows, what kind of gets you to that top, bottom end of the range in your expectations.

Mark Rourke : Yes, Ken, thanks for the question. There’s a couple of influences there. Certainly, as we mentioned, the impacts of gains in the second half of the year are going to be different than the first half of the year. So that would take into account that element. Secondly, we do believe the third quarter, in particular, will have some pricing pressure that we believe will begin to start to be able to address in a more constructive way as early as the fourth quarter if the restocking phenomenon and the trends that we feel that the customers position themselves to would occur. And so those would be the two primary. And the moderate seasonality improvement from the second to the — or excuse me, from the third to the fourth quarter being the other. So the degree of all of those, in our view, will dictate where we finish ultimately in that range.

Kenneth Hoexter : Great. And then any update on the CFO search? Is this focused external, internal, any timing thoughts?

Mark Rourke : No updates for you at this time.

Steve Bruffett : Wait a minute, what CFO?

Kenneth Hoexter : Steve, you’re the one that brought it up. All right.

Mark Rourke : Yes, our process is progressing for our plan. And when we have something to share, we will do so.

Operator: Our next question comes from Chris Wetherbee with Citigroup.

Christian Wetherbee : I guess I wanted to ask a little bit about sort of the fleet, and so maybe a specific detailed question. I think it’s about 6,500 trucks is the right way to think about Dedicated post acquisition, but wanted to confirm that. And then maybe bigger picture on the for-hire side, the network side, as you think about this relative to previous cycles and maybe stretching beyond the next couple of quarters, presumably, we have better freight environment ahead of us. Do you expect to grow back to the levels you were before or proportionately relative to Dedicated? I just want to get a sense of kind of how you think this evolves between Dedicated and the Truckload side over the course of the next couple of years potentially?

Mark Rourke : Yes. Thank you, Chris. I understand the question. Certainly, as we’ve laid out our strategic growth driver within Truckload is and I believe will remain in the dedicated space. And so we’re less focused what the percentages are between those two, but looking for quality opportunities to grow earnings in a sustainable way over an extended period of time is our focus with Dedicated. That being said, we still have a meaningful one-way presence. 4,000 trucks, 4,500 trucks if we do nothing but stay there is a meaningful presence. What gets masked a little bit is the increasing influence of Power Only in our network business from the customer lens. And so from a customer viewpoint, our network business feels larger than our published one-way company driver and owner-operator fleet because of how we go to market, how we integrate those things.

And so we’re going to look at that Truckload network as how to maximize our earnings potential and value to the customer across those various capacity types. And those are the capacity types that we’ll operate in that random, more random network configuration. So it will be the combination of those two things. And so we’re not anti-company driver, we’re very pro in our network business, we like it a great deal. But our growth focus will remain in Dedicated.