Schneider National, Inc. (NYSE:SNDR) Q4 2022 Earnings Call Transcript

Page 4 of 13

Mark Rourke: Yes, sure Scott. As we look at 2022, we look at that on a full year basis. Obviously, we had a lot of work that we were doing in the transition and working with our rail partners to effectively execute that. I’d have you look and maybe the second half of the year by putting the third quarter and the fourth quarter together, and that too, would be on an average almost that 13%, right? So there were different puts and takes based upon when we were staging and preparing for the transition. And obviously, coming down through the stretch with a little less volume, we were a bit more efficient in the fourth quarter than we anticipated. But overall, I think that full year look and that full year 13% or 10% to 14% range is, I think, is very appropriate to assess 2022 in. And as we kind of enter here in 2023, we feel same relative to that positioning.

Stephen Bruffett: And I’d add to that Scott, that we look through a lens of growing earnings dollars and providing a steady growth story to go with our organization here. And so, there’s a balance between volume and margin that we’re conscious of and that can – as we adjust those dials, it could vary a bit by segment and by service offering is what we’ve got going on in there. And so, I anticipate some of that to continue. But the point I’m trying to make is we emphasize growth in earnings dollars and aren’t necessarily trying to always be at the high end of the margin range or whatever, depending on what type of profitable opportunities we see ahead of us.

Scott Group: Okay, thank you guys.

Operator: Our next question is from Bert Subin with Stifel. Please proceed with your question.

Bert Subin: Hi, good morning, and thank you for the questions.

Mark Rourke: Good morning, Bert.

Bert Subin: I guess this is probably for you, Mark. You weren’t able to stay above the $400 million mark in logistics during 4Q, which you guys mentioned the clear rate and volume headwinds, where does that segment go from here? And I’m not really talking about 2023, but more maybe 2030. You talked about intermodal doubling in size by 2030. Do you see a similar setup for the Logistics segment? And if you do, do you think that becomes more a function of an increased footprint in the digital side or is it really more on the Power Only side?

Mark Rourke: Yes, Bert. As it relates to the logistics side of the business, we really place Logistics, Intermodal and Dedicated as our strategic growth drivers. On the logistics side, less capital intensive and so, getting a bit more capital intensive with the Power Only offering, but our strategic approach to that is why we have a complementary commercial collaboration with our asset side of the business. And I think that’s one of the real benefits of a brokerage business tied to assets is your ability to collaborate and Power Only is a perfect example of that between assets and third-parties. But we also have heavily invested in not only the ability to generate our own freight demand within Logistics, so they can chart their own course and be accountable for their own success while collaborating, but not dependent upon our assets.

Page 4 of 13