Stephen Bruffett : Yes. So we don’t break down the margins within the geographies, but we’re — it is a really great opportunity for us to be able to grow. So currently, there’s opportunities of freight that’s currently running over the road. And we’d say that there’s a few percentage points of difference between — penetration between intermodal and over the road in Mexico versus other similar long-haul freight. And overall, it’s a very small part of our book, but the percent of increase is much higher as well as the overall market growth in Mexico, driven by near shoring. So the incremental volume is still relatively small, but we’d say that longer-term opportunity is larger.
Mark Rourke : Jason, so it just opens up some new markets for us as well as it relates to the automotive sector, as we made a couple of acquisitions now that is more automotive-centric. We’ve established some deeper, more meaningful relationships there. And — but most importantly, is a reliable service product that is truck-like in service transit and the consistent ability to deliver that, which has always been the difficulty we’ve gone through ebbs and starts with growing share of intermodal out of Mexico that we’ve had difficulty over time sustaining just because of the service reliability. This combination, I think, has certainly changed that, but it’s also — we have a lot of changing of perceptions to do because of all the prior experience of not being so consistent.
And so a lot of our efforts jointly are getting after that with a series of customers, and we’ve been very, very active with that the last several months because we didn’t get a chance to do that in front of the allocation season as much because of the timing of all of this. And so — what we also now have is the benefit of some experience and some proof points as well as now getting in front of the allocation season and a great opportunity when you can deliver truck-like service for a cost benefit and also emissions benefit, it doesn’t get much better than that.
Jason Seidl : You guys are growing this at a double-digit clip, and the rest of the business is obviously under a lot of pressure. Are you experiencing at least some upfront cost to reposition equipment?
Mark Rourke : I would say the 2 markets, the head haul markets, we would consider North Bound Mexico and particularly Southern Cal as 2 primary head haul markets that — because we’re priming the pump there. It’s a higher percent of costs as we’re seeing on empty repositioning, particularly on the West Coast based upon current rate structures as well. So it’s a bit more punitive in the short term, but again, I think we’ve a balance and with the actions that we’ve gotten, we can limit that going forward.
Jason Seidl : Okay. And my follow-up here, Steve, I have to give you one before you retire, you talked about CapEx likely coming down in terms of the direction for container ads on the box side, given that you have so much pent-up capacity, is that one of the directional moves down that we should expect to see in ’24?
Stephen Bruffett : Yes, that’s a good insight there, Jason, and we would anticipate very little, if any, CapEx needs in 2024 for either container or chassis in our intermodal operations. We can leverage the investments we’ve made in that business over the past couple of years to position ourselves there, whereas we did have some CapEx in 2023, particularly for chassis. So that will be part of it and just an overall assessment of things. But to Mark’s earlier point, we have a new acquisition in the fold with M&M transport. And so there will be some amount of incremental CapEx that just comes from the increased size of the fleet.
Operator: Your next question comes from the line of Chris Wetherbee with Citigroup.
Christian Wetherbee : Mark, you had mentioned that you said there were some pockets of maybe better priced freight that you could potentially move some assets around depending on what the market environment was. Just want curious as sort of think about what that might look like? Is that taking assets out of network and potentially putting them in dedicated? Or is there other types of business out there that you think you could capture here?
Mark Rourke : Yes, Chris, thanks for the question. And my comment was more intra network, but we’ll be opportunistic as well and looking to put our capital in the best place for a return and if we get even more growth than we anticipated and dedicated, that could be a secondary decision. But my primary comment there was opportunities within the network itself and within the current environment.
Christian Wetherbee : But — okay, that’s helpful. I appreciate that. I guess — maybe that leads to sort of a follow-up question around network size. As you think about it, obviously, you guys have done work and acquisitions on the dedicated side to continue to build that. As you look out maybe into 2024, how do you think the mix of network versus dedicated should look like from a fleet size perspective?
Stephen Bruffett : Yes. We’ve stopped our thinking of — changed our thinking on that over time, Chris, is that we don’t have really upward bounds of where we see dedicated growth either organically or acquisitively, as long as it returns hits our return profile and hits our contract profile of what we’re after for durable dedicated. So from that standpoint, we would be all oars in the water and growing as makes sense for us. That being said, we do believe over time that we benefit from having a healthy one-way offering or a network offering. I think increasingly, though, we could see that being more trailer-centric over time. And we’re looking to how we best optimize against our company capacity, owner operator capacity and other third parties around power only.
