Mario Harik: Thanks, Bruce. So this is a topic in terms of employee engagement and satisfaction that is very important for all of us. And here recently, our latest quarterly employee engagement service — survey we did here in the month of July had another record of employee engagement and satisfaction across our organization. And our latest frontline employees survey for dockworkers and drivers was a company record since Conway started measuring it back in 2009. And the way we’ve been able to achieve those numbers is that, the entire organization is spending a lot of time in the field. Just to give you an idea, last year, for me personally, I visited 50 to 60 service centers. So one to two per week where we – and this applies for — Dave has been with us now for three months, he is out in the field every single week.
Same thing with the folks who run our east and west divisions. And all — the entire leadership team is spending time in the field getting feedback from our employees and how we can improve what we’re doing with them. And some of these could be how we manage work, some of it could be around compensation, some of it could be around tools that we offer them. And when you listen and take action, you see that your workforce wants to be part of the company — a growing company and providing great service for the customers as well. So lot of these are things that we’re doing and we continue to see here record employee engagement. On the wage increases, we typically do those on April 1 and this year, we have taken — we’ve also given all of our folks in the field their wage increases in the beginning of April.
Operator: Our next question is from Scott Schneeberger with Oppenheimer and Company. Please proceed.
Scott Schneeberger: Thank you very much. Good morning and congrats, Kyle. Mario, could you just speak to what you see out there as far as the demand environment across your end markets? Obviously, a lot of focus on what happens post-Yellow, but just on the general environment heading into the back half of the back-to-school season, the peak holiday, just what are you seeing, how are you feeling about where we are in the cycle? Thanks.
Mario Harik: Thank you. I’ll first start with the first half of the year and then what we’re seeing pre-disruption and what we saw post-disruption. Well, we saw the trough in the first half of the year from a freight demand perspective in the month of March and volumes modestly improved in April and May and then got weaker again in the month of June. Now, July ahead of the disruption, in the first half of the month, we had seen our shipment count and tonnage flip to positive, signaling a slightly improved freight demand environment. Now, if you break it down to date, two-thirds of our customers are industrial companies and what we’re seeing there is that, the ISM, which is an index we look at for manufacturing, has been trailing below 50 for the past nine months, it did modestly improve in the month of July versus June.
And we’re hearing that from our customers, there is mixed feedback. Some portions of the industrial economy are doing well, others are seeing softer demand in the back half. So it’s fairly mixed. Namely, automotive and the industrials are doing very, very strongly here. On the retail side, we continue to see improvements in managing elevated inventory levels. Most of our retail customers have worked through that inventory and do expect stronger demand in the back half and they do expect also a decent holiday season coming up here. So it does look like the freight markets have troughed from a demand perspective, but we’ll see how things roll forward here over the next couple of quarters.
Scott Schneeberger: Thanks. Appreciate the overview. And then I was just curious, accessorial charges is an initiative of yours. I don’t think you’re going to really delve into that too much until the back half of this year and that’s a long-term initiative, but could the Yellow situation help you jumpstart it? I know you’re about low double digits of overall revenue right now. Where do you see that moving, how quickly, and just a progress report on where that is? Thanks.
Kyle Wismans: Sure. Thanks for the question. So when you think about accessorials, it’s one of our many pricing initiatives we’re excited about and certainly this disruption will enable us to drive some pricing actions more quickly. When you think about what we’re doing, most recently, we’ve put in place technology and process improvements to ensure we’re consistently capturing location-based accessorials. We’re also consistently making updates to our tariffs, not just to make sure we get paid fairly for the services we provide. We also see opportunities around certain services we don’t have now, really value-added services and all these things can help us accelerate really in the back half.
Operator: We have reached the end of our question-and-answer session. I would like to turn the conference back over to Mr. Harik for closing comments.
Mario Harik: Thank you, operator, and thanks all for joining us today and for all your questions. This is a very dynamic environment in our industry and we remain focused on unlocking the massive potential we have in our company by continuing to provide great service to our customers. One month into this quarter and we have a lot of great momentum. We’re making further investments in capacity. We’re moving more freight in our network and we’re driving higher yield growth. We look forward to seeing you guys again in the call in November. Thanks, all.
Operator: This concludes today’s conference. You may disconnect your lines at this time. And thank you for your participation.
