Scott Group: Hey, thanks, good morning guys. I just wanted to try one different way. Can you maybe — because we don’t really know intra-month seasonality. Just in the last like week or so, what is tonnage or shipments tracking up year-over-year. I’m guessing something better than that 4% and 9%, but any color on the year-over-year just in the last week or so. And then just — we wanted to sort of get a sense in the run-rate into August. And then any color on how to think about the OR sequentially Q2 to Q3. That would be helpful. Thank you.
Ali Faghri: Good morning, Scott. This is Ali. So in terms of the tonnage and shipment count, as we mentioned, in the month of July tonnage was just up over 4% year-over-year and shipment counts were up about 9%. Given the acceleration we did see towards the end of the month, you can assume that the year-over-year growth rates for both tonnage and shipment counts were up more than we thought for the full month. As we mentioned, from the beginning of the month to the end of the month, shipment counts were up about high single digits sequentially. Now, when you think about the third quarter, I’ll walk you through the moving pieces here. So from a tonnage perspective, normal seasonality is about a 4% sequential decline in tonnage Q3 versus Q2.
Now, that would imply Q3 tonnage down in that low to mid-single digit range on a year-over-year basis. We would expect to do better than that. July clearly outperformed with tonnage up slightly over 4%, but I would point out that the monthly compares do get more difficult as the quarter progresses. Last September, we saw tonnage inflect positive year-over-year. So overall, we would expect positive tonnage year-over-year in the third quarter and we’ll give another update on August in early September. On the yield side, we did have strong momentum even before the recent industry disruption. Yield growth accelerated through the second quarter and that continued into July. Our current baseline forecast is that Q3 yield ex-fuel will accelerate versus 2Q on a year-over-year basis, call it, somewhere in that 3% year-over-year growth range.
And then lastly, from an operating ratio perspective, a typical seasonality is about 230 basis points deterioration Q3 versus Q2. Given how the month of July played out, we would expect to outperform seasonality for OR by at least 100 basis points. Now the magnitude of that outperformance versus seasonality, that’s going to be driven by how tonnage performs through the rest of the quarter. And as Mario noted, there are some incremental cost to consider related to that uptick in volume. For example, we may need to increase field labor and also tap into purchased transportation as a source of supplemental capacity on a short-term basis. But overall, we would expect to outperform seasonality by at least 100 basis points and we’ll have a better idea on the magnitude as the quarter progresses.
Scott Group: Okay. Helpful. And then just, Mario, just real quick like, Yellow leaving, how does it change in your mind the timeline of getting to that low 80s, 80% operating ratio that you want to get to?
Mario Harik: When you look at the long-term target, Scott, there is a good likelihood that the current market disruption would enable us to accelerate price and volume growth beyond our original targets. Now, with what’s happened over the last few weeks, it’s a bit too early to tell how it kind of manifests itself for the long term. Our focus continues to drive OR meaningfully lower in the years to come. And that’s why we’ve always said there’s at least 600 basis points by 2027. And we still feel very comfortable with that.
Scott Group: Thank you, guys.
Mario Harik: Thank you.
Operator: Our next question is from Fadi Chamoun with BMO Capital Markets. Please proceed.
Fadi Chamoun: Yes, good morning. Thank you. So, Mario, given kind of the focus on service and obviously the — that being strategic priority for the long-term, how is the network handling this kind of uptick in volume seen in July versus Q2? And how are you making sure that, kind of, you maintain that momentum on the service side? And related to that, maybe like from a pricing perspective, is there an opportunity to accelerate the mid-single digit in the back half of this year, just given the environment we’re in now?
