Ali Faghri: Sure, Ken. This is Ali. So we do expect to outperform seasonality by 100 basis points. That’s going to be primarily driven by our stronger yield growth. Just keep in mind, we are coming off nearly 400 basis points of outperformance versus seasonality in the third quarter. So we’re delivering 100 basis points on top of that 400 that we delivered in the third quarter. I’d also point out that on a year-over-year basis, that 100 basis points of outperformance versus seasonality would imply 200 basis points of year-over-year OR improvement and about 20% EBITDA growth in our LTL segment ex real estate. There are also a few short-term impacts to consider from the investments we’re making. As we continue to invest in incremental capacity that comes with higher depreciation.
That was about 120 basis points year-over-year headwind to OR in the third quarter. We would expect a similar impact in Q4. We’re also investing and growing our local sales force. And overall, we do expect these investments to generate strong returns for us over the medium to long term, but they will have a modest cost impact over the next few quarters. So we feel comfortable with the roughly 100 basis points of outperformance versus seasonality for OR. It is still very early in a dynamic environment. And ultimately, that magnitude of outperformance is going to depend on how tonnage progresses through the rest of this quarter.
Kenneth Hoexter: Great. Thanks for the clarification, Ali. That’s great stuff. And great detail on the progress so far. So congratulations on a great quarter. Can you talk a bit about your thoughts on, I guess, two things. One, on the yellow, I guess you have 294 service centers. So how are you thinking about positioning into this? Are there different locations you may want to expand on? How do you think that process goes? Do you think it brings more than needed capacity into the sector? And does that impact the ability to get pricing? And then on that pricing, can you talk about how much of — have you already renewed versus what is still to come?
Mario Harik: Yes. Sure, Ken. This is Mario. On the yellow service centers, it is an opportunity for us to potentially accelerate our capacity growth. We are participating in the process, and we’ll see how things play out over the next few months. Now our focus from a physical network capacity perspective has been to grow the network in markets where we see higher demand from our customers over time. And we don’t look at these things for the next couple of years, but we look at it over the next 10-plus years in terms of where the freight markets will be. We’ll have more demand in them over time as well. So as I mentioned earlier, we’ve opened up so far more than 500 net new doors. Here in the quarter, we expanded two service centers into Atlanta and Dallas Metro areas, and we just broke out in a service center in Central Florida and we’re going to continue executing on that plan.
But I get these yellow service centers, we’ll see where the process rolls out, and it will help us accelerate that plan over the years to come. Now in terms of capacity coming back into the network, it’s tough to estimate what percent of these service centers would be back in the hands of LTL carriers. We estimate it to be roughly around 50%, but it will depend on other users for the land or these locations for other industrial-type applications. Now for the service centers that will come back into LTL, it will take time. Keep in mind that a lot of these service centers to go back as the process has to play out. And then a lot of these service centers to get back into operations, they take time to get up to the standards of the different carriers.
