Mark Rourke : Thanks, Jack, and good morning. We don’t anticipate having pricing issues in the Dedicated business for all the reasons I think you asked the question as these are multiyear deals. You’re very integrated with the customer and providing either a very, very high level of service or specialty equipment or other type of configuration that requires protections within how you contract the business and how you price the business to include how you, over time, have escalators based upon market conditions. And so all of those point to very long-term benefits for both parties. That’s our approach to that, Jack. We’re not looking to play in the dedicated space that’s just masquerading as one way based upon where you are in the cycle. And so our approach to that, we have very strong disciplines as it relates to that within the — in the business. And the performance of the business through this cycle has been quite strong, and we will continue to expect it to be.
Jack Atkins : Okay, Mark. And I guess shifting gears to the Intermodal segment for a moment, kind of going back to Tom’s question there. But if I look at the second quarter to third quarter and kind of progression within Intermodal, your revenue per shipment, I think, was down 4.3% but your cost per shipment was up a little over 3% sequentially. Can you maybe walk us through some of the dynamics on the cost side there that are — is it the impact of dray, is it — maybe your rail cost, but felt like costs were going up sequentially when revenue was going down. And were there any kind of unusual dynamics affecting that in the quarter?
Mark Rourke : On the cost side, just a couple of dynamics because the network is not completely where we’d like it to be from a balance standpoint, we did have higher empty repositioning into some of the head haul markets that I mentioned in my opening comments, Jack, particularly in service of Southern California and Mexico. We think over time, we can balance that as a network and the actions that we have taken to do that. But secondly, I think it really just revolves around where we are in the cycle and the effect of when our purchase transportation costs adjust based upon market dynamics. And so in a declining market, as I mentioned, I think that’s the most difficult part of the cycle, and that’s exactly where we are here in the third quarter. So I believe it does get better for us from here.
Operator: Your next question comes from the line of Jon Chappell with Evercore ISI.
Jonathan Chappell : I wanted to tie a loop on the guide, if I could. You pointed out a lot of — what I would consider kind of onetime cost, fuel, lower — gain on equipment sales, some of the other issues in 3Q, and the 4Q guide basically assumes a pretty similar, maybe up a few pennies fourth quarter. So what I’m trying to get at is, is there any continued deterioration in some of the core pricing or margins across the main business lines? Or is this strictly that the gain on equipment sale is going to be substantially lower in 4Q, offsetting any of the type of improvement or dedicated tractor growth that you mentioned in the prepared remarks.
Mark Rourke : Yes. Good question. Thank you. I’ll throw some perspective and then let anybody else chime in. As we look at the quarter, as we don’t expect a lot of seasonal lift outside of — perhaps the e-commerce driven part of the supply chain as we get through the end of November. We also looked out to what we expect in December. And I think that’s really the key for us as we look towards the quarter. We think, certainly, October, November will be fairly typical, at least based upon current run rate in the month of December, particularly the back half, we’re a little cautious of what we believe that could look like. And so that’s a little bit of an influence. But predominantly what you described, we don’t expect the gain on sale of level sequentially. And we think, as Steve mentioned, that we’re pretty much through the pricing reset, and we don’t expect any further erosion, and we’re only going to be building from here going forward.
Jonathan Chappell : And then as my follow-up, where you just left off. As we think about the beginning of 2024, I mean, obviously, seasonally, the first quarter is weaker. We’re talking about bottoming in pricing and kind of all different business lines without giving any level of guidance conceptually, should we think that 1Q at the very minimum and potentially 2Q looks very similar in a lot of the different metrics to the back half of ’23 before you start to see more of a reset in contractual pricing or even spot pricing across all 3 business lines.
Stephen Bruffett : Yes, this is Steve. I think in our earlier comments, we suggested 2024 being a year of transition. And I think that from what we can see sitting here today, there probably would be a sluggish start to the year. You never know, something often happens once you switch from December to January and find yourself in a different arena. But we also mentioned that we are seeing some signs of shifting of things and targeted opportunities to begin to see some pricing improvements across our book of business. And — so we’ll continue to pursue those. And — but I don’t see it just instantly snapping back. So I think the first quarter itself of 2024 will probably be a bit more of the same, but we do believe that there’s an upward ramp that begins as we begin to exit that first quarter.
Operator: Your next question comes from the line of Brian Ossenbeck with JPMorgan.
Brian Ossenbeck : I wanted to ask more about competition this time within intermodal. There’s a lot of boxes stacked up there. I wanted to see if you could give us a sense of how you’re treating that within your network? And then as we look at one of the main competitors on the Western rail, they said that they’re going to tilt a little bit more towards volume growth next year, which implies at least maybe not pushing as hard on price as they might have been before. I just want to see if you can put that together and give us a sense in terms of how intermodal competition looks and if it’s different by any of the quarters around?
Stephen Bruffett : Yes, I’d say that still in terms of stacks, I think that was your question, there’s probably 10% to 15% industries on stack. But when we look out the market opportunity here within Intermodal is somewhere between 2 million and 3 million shipments. And I’m saying that based on getting back to 2017 and 2018 level of mix between over-the-road and Intermodal — if we were to get back to that level, that’s about 1.5 million shipments that would convert from over the road to intermodal. And we are starting to see some other markets that are opening up. Mexico is a great example where that mix between intermodal and over the road has historically been very low. And now that we have a different level of service, we’re starting to take advantage of that and find opportunities there.
We’re also seeing customers that are more willing to make decisions based on sustainability. And that is really just an emerging trend. That’s why I would say in this industry, there’s opportunities for far more growth. The #1 competitor in intermodal, it’s not another intermodal provider, it is over the road. That’s where the 3 million shipments are potentially coming from, and that’s where our focus is.
Brian Ossenbeck : And any specific thoughts on competition within the intermodal space itself is everybody is long on boxes short on volume, at least for the time being. And then maybe, Mark, if you can just add on some commentary about pricing and the level of confidence you have with shippers willing to — partner willing to do some of these conversions versus maybe take another bite at the apple on rates as we’re still on a — it looks like a lower for longer environment.
