Hub Group, Inc.

Hello and welcome to the HUB Group first quarter 2024 earnings conference call. Phil Yeager, HUB's President, Chief Executive Officer, and Vice Chairman, Brian Alexander, Chief Operating Officer, and Kevin Beth, Chief Financial Officer, are joining the call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the prepared remarks. In order for everyone to have an opportunity to participate, please limit your inquiries to one primary and one follow-up question. Any forward-looking statements made during the course of the call or contained in the release represent the company's best good faith judgment as to what may happen in the future. Statements that are forward-looking can be identified by the use of words such as believe, expect, anticipate, and project. and variations of these words. Please review the cautionary statements in the release. In addition, you should refer to the disclosures in the company's form 10-K and other SEC filings regarding factors that could cause actual results to differ materially from those projected in these forward-looking statements. As a reminder, this conference is being recorded. It is now my pleasure to turn the call over to your host, Phil Yeager, you may now begin.

Good afternoon, and thank you for joining Hub Group's first quarter earnings call.

Joining me today are Brian Alexander, Hub Group's chief operating officer, and Kevin Beth, our chief financial officer. Market conditions have remained soft despite improved demand trends and inventory restocking, largely due to excess truckload capacity that has yet to exit the industry. This trend is counter to many prior cycles and has led to a prolonged trough in the spot market. This has in turn driven a competitive start to bid season as carriers attempt to deploy latent capacity and spot market pricing is pressuring contract rates. We are seeing some positive signs in the market with capacity exits and many customers orienting their purchasing decisions to value both service and costs. However, this capacity attrition is not occurring at a pace that is leading to more stability in the broader truckload environment. Despite these market challenges, we continue to execute well on our strategic priorities. Consistent with our focus on diversifying our service offerings to expand value to our customers, the integration of our recent final mile acquisition is performing ahead of expectations and our strong balance sheet and robust pipeline of opportunities positions us to drive growth via strategic acquisition. We also deployed our capital allocation strategy due to our strong free cash flow generation, issuing our first ever cash dividend, completing our stock split, and opportunistically repurchasing shares in the quarter. We are executing these initiatives while enhancing our operational discipline and delivering premier service to our customers. The challenging broader industry fundamentals have more heavily impacted our intermodal and brokerage services. However, we have outperformed expectations in early bid season as we focus on utilizing our improved rail and chassis agreements, enhanced street economics, better fleet utilization, healthier network velocity, and extremely strong rail service to convert business from over the road in both short and long haul segments. We remain focused on execution in bid season, and our deliberate approach is helping to drive improved costs through our velocity and balance-oriented growth plan. Along with this, our brokerage continues to grow load count as customers recognize the value of our multiple service offerings, scale, and superior service. The diversification of our services and focus on cost management has led to enhanced stability in our earnings through this elongated cyclical downturn. We have a high service, integrated, and cost-competitive value proposition across all of our contractual solutions. In Final Mile, the expansion of our capabilities and high service levels is helping us deliver improved cross-selling and growth. Our warehousing solutions are flexible and have a growing national footprint, which brings enhanced value to our clients. Within managed transportation, our continuous improvements, technology, and purchasing power is driving customer retention and organic growth. Last, within dedicated, despite short-term headwinds due to startup costs and increased claims expense, we are utilizing our award-winning service to grow with our existing clients. We have a strong pipeline of opportunities across all of our service offerings, which we believe will drive growth through the remainder of the year and position as well as the market recovers. We are excited about the progress we have made in our strategic plan while delivering enhanced execution and excellent service for our customers. We believe that there will be a broader market transition in the future driven by capacity exits and inventory restocking, and we remain focused on positioning HubGroup for long-term success through our consistent investment approach and relentless focus on delivering for our customers, team members, and shareholders. With that, I will hand the call over to Brian to discuss our service line performance.