Jerry Revich: Super. And Jim, maybe just to expand on the recycling part of that conversation. So we have the plant downtime this year, but also the returns on the CapEx that you folks are delivering. So what level of improvement are you anticipating 2025 versus 2024? Correct me if I’m wrong, I think the original plan called for something like a $90 million year-over-year benefit. Is that still the plan for 2025 versus 2024, so we get that on top of the $25 million swing that you spoke to?
Tara Hemmer: I can speak to that. So as we mentioned, Jerry, we have 13 plants that we expect to bring online this year and another 13 next year, and those remain on track today. If you think about our exit in 2024 related to headcount, we’ll be at a point where we’ve gotten 70% of the headcount out by the end of 2024 on the automation journey. So we should see not just the pickup from shutdown costs, but also from the benefit of 30% improvement in labor costs and operating expenses from those plants. It’s a great example of how we’re able to bring to life in some of these communities. We were just up at Germantown last week for the grand opening celebration, and bringing in more capacity is a great way to differentiate WM and these key markets that we operate in.
Jim Fish: So to use a baseball analogy, since we just signed a deal with Major League Baseball, Tara will be in the seventh inning at the end of the year?
Tara Hemmer: Exactly. Seventh inning stretch.
Jim Fish: All right. Perfect.
Operator: Thank you.
Jerry Revich: I appreciate the discussion. Thank you.
Jim Fish: Yeah. Thanks, Jerry.
Operator: Please stand by for our next question. Our next question comes from the line of Sabahat Khan with RBC Capital Markets. Your line is open.
Sabahat Khan: Great. Thanks and good morning. Quite a lot of color there on kind of the tangible labor savings. Is there any way to quantify some of the operational efficiencies or savings in terms of the technology investments that you’re making, some of the data analytics tools, just in terms of how much bps you might expect over one year, three years and what you’re kind of seeing relative to expectations?
John Morris: Well, I think, the one line we can certainly look at, I think Devina had some of that in her prepared remarks, is kind of what the ratio is of direct labor to revenue. We saw a nice improvement there. I think that’s a combination of two things. One, we’ve continued to be very disciplined about pricing. We’ve said we’re playing the long game here and I comment about customer lifetime value. So I think part of the benefit is we’ve continued to drive quality revenue at the topline across all the collection lines, and frankly, the post-collection line is worth noting. It didn’t come out, but this was our best quarter in history from a landfill pricing standpoint and a transfer station perspective. So the topline is strong.
But I mentioned efficiency and part of what’s driving that mid to up to high single-digit efficiency is the use of technology to drive efficiency. Our turnover number’s worth commenting on again, because we are at all-time lows at about 18% and that takes a lot of pressure off if you think about the cost, the friction cost of training folks, putting second people in trucks and all those things. So that’s another part of it. And we’re down about 750 routes year-over-year and you can look at our volume. Part of it’s being driven by the automation of residential, but the rest of it is we are less capital intensive for basically doing more work in the commercial industrial lines year-over-year.
Jim Fish: John, you mentioned also — and John mentioned that in his script that 90% of the roll-off line of business has been rolled out on this NDO, which is the term for our optimization model. But we haven’t rolled out commercial and haven’t rolled out residential on that model yet. So we still have a fair amount of room to go there and all of this was really four years or five years ago an admission by us that our routing was not as efficient as it could be if we truly used technology to benefit that. I think that’s probably the case across the entire industry and so four years or five years ago, we decided that that had to change and now you’re seeing the fruits of that.
Sabahat Khan: Great. And then, I guess, as you think about optimizing pricing and some of the data analytics you’re using to figure out the right price for the right customer based on their value, do you believe based on the work you’ve done to-date that the model is at a right place? I’m sure there’s an element of test and learn, but do you think you’ve got the right factors? What sort of your data telling you in terms of how well that model’s working?
Jim Fish: I think we — I — look, there’s always room for improvement. So I would not say that we’ve perfected this. But from when I was a price guy back in the early 2000s, it’s night and day. I think the team has done a spectacular job using data and analytics to their benefit and making sure that we are looking at the customer who really drives the decision and as opposed to driving the decision just purely based on a number that we needed to hit in our price metrics. So I would tell you that we’ve made a ton of progress there. Are we perfect? We’re not, but so much better than we used to be.
John Morris: I would say, Jim, our customer metrics, I commented on it…
Jim Fish: Yeah.
John Morris: … that’s really the barometer.
Jim Fish: Okay.
John Morris: When you look at our gross and net PIs, when you look at customer churn, service increases and decrease in our net promoter score, I think those are all the measurements sort of right to the equal sign of how effective our program is.
Sabahat Khan: And then just one quick one, I guess, on the revenue guidance update there. I think just want to get a little bit more color on the software rollout portion. It sounds like a bit of homebuilding and industrial slowdown. Is that just a change in the view of how the macro’s going to evolve for the rest of the year based on what you’ve seen here today or was there any specific issue that came up in industry? I just want to get a bit more color on the evolution of the view on the roll-off and the macro? Thanks.