And if we do all of that while embracing our Dedicated franchise and our cross-border franchise within One-Way as well as the success we’re having in gaining share in logistics, I like the positioning as this thing turns. When that turn happens precisely, it’s tough to tell. We obviously, the bid season is predominantly over. But peak season is still here – ahead of us. The consumer is hanging in and showing durability that I think has been a bit surprising to most. If that continues, the market holds up, I think there is an opportunity for us to see improvement as we close out the year and start into next year.
Amit Mehrotra: Yes. And just a quick follow-up, if I may. Do we take another leg down in the OR in 3Q? It looks like based on your guidance, revenue in both Dedicated and One-Way should be flat to up slightly. But obviously, you got a little bit fewer gains sequentially. Are we at the point now where OR is kind of holding the line here? Or do we take another tiny leg down and then recover from there?
Derek Leathers: Well, the used market is a big gray area right now. The gain on – the gains line is going to play a role in that answer. We know it’s decreasing. We know volumes will be lower and margin per unit will be lower. We also know we’re gaining momentum on the cost side of the equation. And as I’ve previously mentioned, we have this opportunity with what is currently a negative, which is an outsized portion of the fleet in the spot market to be able to improve upon that sort of with some immediacy as we – if we see rate improvement in the quarter. At this point – and if you really look back historically at Werner Q2 to Q3, flattish is kind of the best word to describe it. I think that’s a fair way to think about this year as well.
But this year has got some unknowns in it that we’ve got to grind through. I can tell you that the team is focused on doing exactly that. And we are not going to be looking to grow that One-Way fleet, certainly in this environment. And if we have the opportunity through some implementations to do more fleet migration from One-Way to Dedicated, that will also take the pressure off of that OR.
Amit Mehrotra: Yes, makes sense. Thanks. Thanks a lot. See you in a couple weeks. Appreciate it.
Derek Leathers: All right, thank you.
Operator: The last question today comes from Brian Ossenbeck with JPMorgan. Please go ahead.
Brian Ossenbeck: Hey, good evening. Thanks for taking the question. Maybe, Derek, just to go back and drill down on that point, you’re talking about the latency of the inherent upside with the extra spot, which I think you mentioned is about 15% of One-Way or mid-teens, rather. Do you have some shorter-duration contracts in there as well that could help? So maybe just help us think about the speed with which you can turn that around and maybe sort of the benefit you’d expect if and when that spot market does start to inflect.
Derek Leathers: Yes. So in One-Way, we’re about mid-teens on the spot side, and that is essentially immediately fluid capacity that can move either up and to the right within spot to better opportunities and/or support customers’ needs as their cautious optimism comes through in fruition with actual volumes. So we’re in those dialogues all of the time. We’ve seen some movement even within July thus far. That’s positive and encouraging. As it relates to some remaining contractual renewals, obviously, the environment and our discipline is only further entrenched as we get into the back half of the year based on trends we’re seeing with capacity. So that allows for some optimism there. Those are countered, of course, with the reality that some of the first half bids are being implemented as we speak and actually taking effect in the quarter.
So yes, we are cautiously optimistic we can make some moves up. The biggest one – the biggest two would be movement within or at – we’re moving out of spot with that mid-teen percentage and playing a more active role, and even a muted but relatively normalized peak season would play a fairly pivotal role given that 15% of that fleet is operating at significantly lower rates than where they would traditionally have come in to the fall operating at. And we’re seeing activity in that as well. So that’s a lot of things to incur – that look encouraging, but I don’t – I want to make sure that we’re clear. There’s still a tough fight ahead of us that we’re still in this for a quarter or two, and we’re going to put up that good fight.
Brian Ossenbeck: Understood. Thanks Derek. And just on the self-help side, to follow-up. Chris, maybe you can talk a little bit more about the cost savings program, where you are currently in terms of a run rate. How much of these are structural versus what might be more volume variable? And actually, I think maybe you even raised the number to $40 million from $34 million. So if you can address those. Thanks.
Chris Wikoff: Yes. Hey Brian, yes, happy to do that. Yes, from the last earnings call and quarter, we have raised it. The targeted and identified in-year savings for 2023 is over $40 million, and the realization rate has also progressed about the target and the realization. Over 40% is realized through the first half. Multipronged in terms of what makes up that $40 million. It’s a combination of driver and non-driver salary and wage changes, whether that be through head count or through just structural changes, particularly for new drivers coming in. There’s savings from having reduced turnover in the driver pool, lower spend on recruiting and just overall impact by having less turnover. It’s expensive to train and onboard a driver and get them into place only to see turnover.
So the more that we’re focused on reduced turnover, there’s significant savings there as well as just having a strong driver pool and spending less on recruitment. Then investing in fuel efficiency, whether that be through a certain equipment that we believe has a big opportunity to improve margins going forward as we invest in certain equipment that helps with fuel efficiency, auxiliary power units and other things that we’ve looked at and just other initiatives that we – as we track the data, we’re seeing increases in miles per gallon. And then in supplies and maintenance, which is a topic that I mentioned earlier. So it’s really multipronged. It’s across the organization. Its very process oriented. And we feel good about where we’re at and where we’re going.
Brian Ossenbeck: Okay. Thank you, Chris.
Operator: This concludes our question-and-answer session. I’ll now turn the call over to Mr. Derek Leathers, who will provide closing comments. Please go ahead, sir.
