J.B. Hunt Transport Services, Inc.

Q4 2020 Earnings Conference Call


spk_0: ladies and gentlemen thank you for standing by and welcome to the jp hunt fourth quarter two thousand twenty earnings conference call at this time ah participants and they listen only mode after the speakers presentation there will be a question and answer session to ask a question during the session you'll need to press star one on your telephone if you require any further assistance please press start zero or knowledge to and the conference over to your speaker for today with your brad delco vice press didn't of finance and investor relations thank you sir please go ahead
spk_1: thanks god governing good afternoon everyone and thanks for joining us the boy introduce the speakers i would like to take some time to provide some disclosures we're going forward looking statements this call may contain forward looking statements with him illini of the private securities litigation reform act of making five words such as expects anticipates and and estimates are similar expressions are intended to identify these are looking statements
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spk_1: the statements are based on jb and current plant and expectations involve risk and uncertainty that could cause piedra could leave and results in materially different from those set forth in the forward looking statements for more information regarding respecters please refer to jb onto a report on fans and hey and other reports and filings with securities and exchange commission now i would like to introduce the speakers onto entrees call is afternoon i'm joined by our ceo john roberts our see about drunk hello shelley simpson or cheap commercial officer search atp a people in human resources yet carbs are cheap operating officer and president of contract services during field president of in a and graphics are president of highway services at this time i would like to turn the call to our ceo mister john roberts for some ugly comments
spk_5: thank you bread welp auditory we will bid you farewell and good riddance
spk_1: all kidding aside we're thankful the air tony tony want to start a new chapter and to continue are intended journey
spk_5: twenty tony pulis really lesson is not the least of which is that we have a community of employees drivers and providers as and our were incapable of dealing with change and crisis
spk_1: past year also reveal the official natured services we provide as week street challenging and dynamic but ever present demand through twenty twenty reaffirmed again at all the businesses we had committed to in advance again compliment each other and create a very differentiated mark like that
spk_6: we'll look ahead to twenty twenty one and beyond with confidence
spk_1: during the fourth quarter experience a very traditional demand cycles from customers across all services consistent with holiday activities
spk_6: these days were coupled with unusual inventory restocking and import challenges particularly on the west coast our fleet and the highway and contract businesses presented reliable capacity held up well and we discovered new ways to integrate our assets across customers and accounts
spk_5: in intermodal we did we did substantially me all coverage commitments during the quarter and a year however we struggled to achieve meaningful search report as we have been able to do the past most of the inability to provide incremental capacity in particular off the west coast was driven by intermodal network in
spk_1: balance no real increase in our container fleet
spk_5: and a lack of timely a empty equip that repositioning we are working with our network managers pricing teams customers and are real provider to improve on all of these challenges as we go forward our growth and foul mile reveals the positive attributes and market demand for this channel a growth presented in highway services i see it at fifty six percent and jbt at fifty percent for the fourth quarter a point when he is encouraging also the progress made with that adversity sixty platforms continues to reveal good
spk_1: placement and benefit for our customers and carriers additionally we found new ways to cross utilize the systems internally during the year with we expect to continue anticipating questions about our margin targets in general let me submit our plans it if that while since we've given meeting the ludvig to our stated goals and the reality is that some key and put related to achieve those results have changed over time for air level we acknowledge that we have not met our margin go for several years now we will monitor this year's been season to inform our expectations on how well we can expect to recover increases in our overall cost structure clearly we see that certain fundamental conditions have evolved into the small primarily relating to rail
spk_5: part of transportation expand overall rail velocity customer behavior container freak fleet use a son and driver wage costs
spk_1: one way or another we will either confirm our target range shall remain eleven to thirteen for even margins and intermodal or we will reset these expectations based on our customers reaction
spk_5: these large and target comments do not apply to only two intermodal as you're also where we have outperformed a high end of our stated target range of these years for the seventh consecutive quarter these targets are under of you and if deemed appropriate will announce any changes for the segment along the same timeframe as the of they forget yeah
spk_1: ali are stated marjah right for daily t has been eight twelve percent which doesn't fully take into account the continue movement of that segment of more asset like model
spk_5: accordingly this range is also under review for customer reaction all this banks there will be monitoring the market very closely of the coming months and plan on updating our targets on a comprehensive basis at a later date
spk_1: as a reminder a margin gold or establish purely to support requirements for returns on needed capital investments for shareholder and so the we can continue to reinvest in the business to grow to meet the deeds of our customers
spk_5: as previously announced made several leadership changes during for quarter which we believe allow of the company needs going forward in several key areas let me just say that we're excited about all the changes we were able to make our bench is very strong have also made rica now and announcement about investments supporting including and diversity and sustained ability but the university of arkansas
spk_7: were excited as into twenty twenty one and be gone with the momentum and opportunities we see in have confidence in our experience will take us in the right direction out from the color to john cool of little you're putting chief financial officer for his job
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spk_14: david
spk_13: can hear me now hello
spk_14: sorry about that thank you john and morning or isn't good afternoon to those of us have you join us on the call today
spk_13: had a little technical difficulty there a provide a couple a comment on the fourth quarter from their consolidated perspective and then let the business units cover their segments overall we are pleased at the revenue growth this quarter of notable achievements on the highway division as well as dedicated
spk_6: the pressure on the fourth quarter with primarily related you higher costs across network and operations to the congestion and labor tightness from increase great demand higher driver cost to attract in a train drivers in a combat city constrain environment and we also entered a higher at your medical costs the court quarter
spk_13: a quick update on cover cost you continue to offer paid time off to our employees that a quarantine due to call the concerns and we encourage approximately five million not fast enough for their designated as specific decoded for a total of approximately thirty four million year today
spk_14: while i believe our facility work is completely expect covered ppl costs to continue given the current level of case counts and will likely be i had went dress only the near term
spk_13: we continue to closely monitor are working capital metrics and the changing credit landscape as we enter the new year but are encourages we experience what i would consider to be somewhat of a normal fourth quarter with respect their customer collections we resume stock buybacks early in the fourth quarter of childless opportunity in the back half of the quarter and and fell into our blackout period we anticipate containing are normal buyback approach and twenty twenty one
spk_14: we ended the quarter was approximately three hundred and twenty million cash
spk_6: with resulting that of just under one billion
spk_13: we still target our leverage ratio at one time see the dot and anticipate staying close within that range and twenty one we ended the quarter with one hundred fifty million of net cap apps to finish year the crash my six hundred million which has split roughly one third growth cap action two thirds replacement as of today were forecasting your full year twenty twenty one that capital expenditures to be approximately eight fifty to nine hundred million which includes your equipment as well as approximately seventy five million of technology investment in our core transportation mansour insisted the continued development of this technology and twenty twenty with more systems going live and thus becoming depreciable and twenty twenty one her perspective we expect approximately twenty million of incremental depreciation
spk_14: as we bring a systems and operations
spk_15: finally we had some discreet items in the fourth quarter with slaughter effective tax rate ending the full year twenty twenty with a rate of twenty four percent as of today we're expecting or twenty twenty one effective right to be in the range of twenty four twenty five percent oh continued watch for new administration changes that's all i had prepared to and on now turn it over the shelling thank you john and good afternoon my commercial i think of african will have tangent general market trends our expectations on how this will impact or organization and our customers and twenty twenty one and how to can't investments and innovative culture continue to drive our ability to help i saw our customers supply chain meetings it's with little doubt that twenty twenty which would advise challenging and dynamic bright markets in my career a pandemic create a tremendous amount of uncertainty that which felt across the global supply chain a massive shift from a services to a good economy and the inability for supply chain to keep up with to me and have put him inventory levels in a precarious position that will take time to rebuild import level of have and continue to surge and congestion and while at port rail terminals and customer warehouses is also to tragedy to the inefficient use of available capacity combined with the challenges that this pandemic has had directly on our industry here is our drivers
spk_16: the supply of qualified and train driving professional have been impacted by capacity limitations at driving schools quarantine protocols retirement
spk_15: in addition to pressure as a result at escalating insurance costs in a recent drug and alcohol clearing house and fortunately these challenges hyper inflationary cost pressures on our and many businesses and as the market is anticipating we'll pet further inflationary pressure on trying production rate in twenty twenty one after several a car insurance unlimited little a customize everything at michael's back these rate however are necessary to support our investment we have already made a commitment to increase our capacity and both intermodal and three sixty bucks these investments are earmarked for areas that are network where we have confidence in the demand for forest service at appropriate rates and our ability to turn our equipment effectively we do both of these as requirements to support this investment and our desire to generate appropriate returns on investment we also have built in optionality to expand our capacity at the resultant we experience or did season support further investment in other areas of our network but in particular the intermodal western network but challenges always exist in our business what i really want to highlight of the amazing job our organization has done at being able to solve some of our customers toughest challenges in one with an extremely tight capacity environment in the fourth quarter as i think you're we by now our organization and not constrained by the number physical assets we own or operate by their ability is source capacity to our digital platform the marketplace for jp have three sixty he the blending of our physical assets and our digital assets enable us to accelerate our ability to solve our customers problems to solve for yes when they need a capacity the fourth quarter serves as a perfect demonstration at this dynamic as we and many other asset base providers had the constraints on our own capacity that by leveraging the platform idea and j b t are able to deliver record setting capacity performance or customers as an example jbt delivered it's highest revenue since three que of two thousand and eight and with almost nineteen hundred fewer or seventy percent less company own tracked verses that period in clothing i am proud of the team's ability to sell for yes our customers it's the power of our scroll it's the power very diversified offering and it's a power of our platform our customers lean and us during this challenging time which we think continued to support our strategy to on our commitments and maintain a long term focus on serving our customers' needs our organizations mission to create the most efficient transportation network in north america is what drives us to be better and to do more it is what has and what will continue to
spk_1: drive innovation in our company and for our industry and speaking of innovation in my expanded role in the organization i will be spending more time focusing on how we can leverage a platform to deliver more guy you cross the enterprise to our customers i believe the opportunities to deliver value around predicting both price invisibility by leveraging data will be critical element of our strategy moving forward and i'll just say more to come on that in the near term i'd now like to turn it ever seen it like you showing good afternoon but like spend a few minutes discussing the performance about dedicating been a mild and also shed some light on our outline and and sometimes level views on our outlook first to dedicate results that a good had another solid order that delivered the eyes fourth quarter revenue and operating income for segment in our history and we have previously discussed the benefits of or diversified post rebate and the flexibility of operations have allowed us to served with customers are neither while scale back with customers who have been negatively impacted by the current state of the economy the employ for professional outsourced product weeks solution continues to bill as customers and potential customers are fighting with rising is routes cause greater challenges recruiting retaining a professional driving workforce and the realization you know the capital caught up in their own fleet does not provide them the flexibility that we have been able to deliver for our customers we ended totally totally felling one thousand three hundred and thirty one drugs and dps which compares to eight hundred ninety drugs so dear today through the end of september or how you can see in an fourth quarters staff we added a hundred manager drug sequentially which did impact the corner in terms of start of cause and we would expect them faded that we grow to start of cause returning to the business for the neared the mid term also expect the industry has them will continue to face drive a wedge pressure and we will be given a close eye on when we monitor the performance on our fleet and believe we have some of the best wages professional drivers in the industry who enjoy the consistency of working in a dedicated combined finally we do expect returned that reviews the faded a range of selling eight hundred two thousand trucks are year obama services on allow they able to deliver an all time record revenue than two hundred and forty three or two hundred and thirty million or seventeen percent greater than the previous record set last quarter this growth was driven primarily by new contract business brew our twenty twenty and supplemented back with the a back we track are contracted failed progress very similar to the yeah and i was proud of the team's performance intel and eighty four million of new business and final mile route twenty twenty we are continuing to say strength and robust opportunities for growth across our portfolio and are excited about a further building outer exercise equipment channel with the most recent acquisition of mass mood going forward we will continue to make investments in our service and product offering to ensure the high standards of service safety and satisfaction are met in this critical and rapidly growing part of the supply chain we believe these investments are critical had we deliver goods and that that inside the home of our customers customers and the result of these investments and our desire to provide depreciated service product will be focusing on appropriate returns in our business to support the investments
spk_6: also while still early in the new role as ceo oh i thought i would share some a level thoughts on how big we can leverage our platform to manage our assets more efficiently across enterprise
spk_1: if i learned one thing and dcs over the years it the benefit of have ended the in markets and what flexibility that provides our customers and our own operations as a tremendous opportunity for us to leverage the platform to drive greater efficiency the cross all assets across the enterprise and look forward to providing a future updates in the near future that concludes my remarks and i'll turn it over to their and now thank you neck happy new year everyone the corner presented similar challenges for intermodal network fluidity and balance that were presented in the third quarter from similar to what we communicated that we expected would occur on our last part zap this afternoon my comments will focus on network fluidity imbalance the demand pricing environment
spk_6: then i want to talk about two thousand and twenty one in our focus for this year
spk_1: first are volumes were minus two percent not tobar flat in november and plus six percent in december
spk_5: well provider velocity challenges and terminal congestion wait heavy on our container fleet productivity during the quarter
spk_6: while we weren't able to move all the volume available to us we were able to accomplish one of our top priorities that we had communicated since the start of the pandemic and that is honoring our capacity commitments to our customers
spk_1: throughout the quarter we utilized in much higher percentage of the outsource trades capacity in an effort to drive productivity through the network it's included efforts to pull containers from the rail terminals to assist in that congestion challenges we also rerouted significant volume over phoenix arizona and stockton california that would have normally moved from a southern california origin rail terminal is higher costs at the drainage operate in are reflected in the results of the quarter our customers participated with a permanent incremental revenue help cover those costs but that revenue fell short of providing the same margin is what we would have seen with out and activity we have commented on labor challenges we're all facing during the pandemic on the previous earnings cause california was particularly difficult during the quarter we certainly believe the rail network the face and labor challenges that terminals and at locations where we believe our realm providers expect and will deliver better pro
spk_5: activity in the future certainly better than what we experienced in the quarter i make these comments primarily to highlight that we face conditions in the fourth quarter that we can address and improve as we move out of them pandemic
spk_6: so far in january volume demand remains extremely strong and the cost to serve our customers remains elevated rail velocity and congestion has improved for now but labour challenges and increase demand will continue to impact rail the last year the year goes on we fully expect pricing in this bid cycle will come
spk_1: cover the cost increases that we're experiencing that are more structural and nature and our network we believe two thousand and twenty one will present opportunities for us to make progress on margin from costs on all fronts dray rail and productivity have all come at us and a fast pace and twenty twenty and this new here presents are opportunity to price those costs into our business we must find growth opportune
spk_6: studies that compliment our network and provide balance benefits while also increasing poor pricing that reflects the current cost to serve our market the very early and small percentage of pricing results achieved thus far are encouraging we are confident that our customers want to grow with us
spk_1: at prices that support investment in capacity expansion we have ordered over six thousand containers that will be manufactured in twenty twenty one and we have flexibility on how and when those containers will be rolled out we have strong confidence in the ability of our network to consume growth per titular early in the east we also recognize that we still have significant cost him velocity challenges in southern california and simply adding containers is not the only solution required to grow capacity in that key market
spk_6: bnsf and jb han are working together to find better capacity solutions for our customers in our prices will reflect those efforts importantly as we progress through did and we do have opportunities to conclusions are container ordered if market dynamics support the need for additional capacity
spk_1: throughout twenty twenty or employees have been the backbone of our convicts in honor the commitments we made to our customers i am so thankful to our employee base for that conviction and i believe we will translate that culture in of benefits for our financial performance and are returns in twenty twenty one
spk_17: actually it's my prepared comment so now i will turn it over to brad hicks
spk_1: and the during that afternoon
spk_6: and like to hear how on or and beams new role and just how much excitement or the new organization for highway services business
spk_1: which includes both integrated capacity to loosen your ideas in for up my comment about an angle focus on the performed at the both baggins
spk_6: as jelly eluded how we were able to bell for yeah in a very dynamic environment for customers and deliver the capacity they they needed in the cooler
spk_1: i'd be as with able to deliver revenue of five hundred eighty seven million dollars or fifty six percent growth over the prior year which was also thirty six percent growth surprisingly from the third quarter and previous calls a reference or investment in technology and people have been around enabling up the scale with events and we were able to be a link of that dynamic play out in court as we talked about gaming the business or focus has been on being able to grow revenue and gross profit at a disproportionate rate operating costs
spk_5: we were able to deliver thirty one million of sequential gross profit improvement and a corresponding twenty four million increased and operating income which translates into at seventy seven percent incremental margin on every dollar of gross profit
spk_17: speaking of which i get did deliver positive five point six million of operating income in the quarter and while we have shared our expectations for returning to profitability by second half of twenty one and we are going to stand by that you as they were just a lot of unique dynamics in play in the fourth quarter
spk_1: in we expect from seasonal effects flipped continued investment to keep us on track for delivering on that expectation in jp key or track and decks with able to deliver fifty percent growth in fourth quarter revenue year over year to one hundred and forty million
spk_5: the did the i have that he
spk_1: skipping the highest revenue achieve in the segment since the third quarter of oh wait actually had mentioned in her opening remarks
spk_6: and we have approximately seven percent fewer company on trucks vs that time period and you're beginning to see the power the platform allows both ip and gdp to scale with and for our customers to solve for their needs and in the fourth quarter that he was capacity
spk_17: as gdp has shifted to more than at it like model we have an ability to provide trailing capacity to customers and made hall by the jd her own equipment are are independent contractors or power like at the source through the platform it is or three fifty bucks offering
spk_1: it gives us greater options to choose what is best for the customer who is looking for a drop in hook capacity solution and by that i mean the most efficient option that a lip lemonade wait in system
spk_17: to close up my comments i would just like to reiterate how highway services powered by the platform with able to meet the needs of our customers in the quarter my delivering flexible capacity options we continue to be strong activity between customers and capacity in our platform which will continue to support investments into our i wait
spk_1: services solutions
spk_0: whether the the marketplace or within the rethink the program
spk_6: i'd like to turn back read now
spk_17: thanks brad an hour after this point we're waiting for questions you'd like to remind the audience please have given them the length of the posts in the in queue one person one power and you
spk_6: ladies and gentlemen to mind as if i ask a question please pastime and irvine and your first question comes from as a crest whether be was citibank
spk_1: gary thanks for and for taking the question i'm make media can start on jon snow's are opening comments or out intermodal margins just wondering if you're gonna give a little bit more color it sounds like twenty one is a year where you have the opportunity to see some margin expansion i guess i'm curious around the timing of your comments about sort of be questioning whether the eleven thirty
spk_6: he presented the right number going forward can you just give us a little bit more color on the thought process of what it would be what you need to feed his or make a decision on that
spk_15: to prove this is there an eminent under start with that you know i think when john highlighted those comments we just know that the performance of our intermodal margin over several years now would be a question on the call a rather than try to talk through exactly when in two thousand twenty one exactly at what time would we have a public release with some change we just wanted to highlight hey i'd we do agree that two thousand and twenty one is a year that we need to make progress we fully need to
spk_6: i'm in in the pricing market and what's going on around it feels like it's the right time to talk about that the other thing that i think john highlighted is that the margin comments a relative intermodal aren't aren't alone he was highlighting commentary about the enterprise and other business units and that
spk_17: fighting john wanted to talk about that and crew from i know that he didn't he looked at the last five years be a three years of and you'd like to the day between and our relationship with the reds and also a pandemic shall we do believe twenty twenty one will be a more settled year when it comes to our margin target
spk_1: and certainly that's why we had split up our conversation around new equipment on behalf of our customers we want to add that the initial order in and them we're going to work through with each customer through the bed process to determine f that their returns will be appropriate for us to get inside that range
spk_6: okay okay that that self why president and if you follow up picking on intermodal
spk_1: can you talk a little bit about what the rate negotiations are looking like through the fourth quarter in terms of magnitude for twenty one and colors give about what you think you might be blood from erie growth perspective in her model the awful
spk_6: i think on the third quarter call i think i said hi single digits to double digits in i would say
spk_1: that's it that's still remains to be a pretty good
spk_18: place holder for fighting in general for our network there are certainly see markets where it's substantially higher or it's absolutely in the double digit area you know west coast capacity costs is a different challenge for us frankly than elements of say
spk_0: they are easter network and what's going on there when i look at the network and think about how will pricing translate in the bid cycle you know a lot still has to be seen we did say hi single to low double digits in that think that that remains to be a pretty good a pretty good place holder or but certainly there
spk_19: our pockets of our network where i think it will be higher than that becca time for next question comes from the line and john to town with ever car i as i
spk_17: thank you good afternoon everybody and their and it seems like there's gonna be very little reprieve her the next couple weeks and months some you know the typical chinese year her chinese new year slowdown posts peak season just based on ship schedule than and activity it it seems like the that the ports in the running hard the next couple months
spk_6: what's your confidence level in the rails ability to him contain improve this imbalance and fluidity
spk_5: daschle see a significant change in your ability to to meet the volumes that are out there are in the first quarter into the second quarter without any type of february slowdown
spk_17: yeah well i think gum
spk_6: look i'm confident in the way we communicate with the rail provider outlast we are aligned in efforts to try to drive the past the out there i'm also confident in the way our organization or enterprise salzburg capacity challenges i didn't think that obviously there may be a little reprieve in the parcel demand in some other impacts on the rail network and the full truckload intermodal seems do
spk_1: and have some momentum in terms of of our ability to
spk_19: to drive capacity out west scylla i think we'll have a better position going forward in the first quarter them we felt in the early part of the fourth quarter around moving empties out west that doesn't mean that will be moving as many as the customers would like for us to move so hot pink
spk_20: justin and the last the slow down has been a challenge but i think the fourth the first quarter of twenty one does present
spk_5: the potential for better velocity than what we experienced in cute for
spk_6: and then this is a direct follow up to that you'd mentioned am kind of briefly the the opportunity east coast are you seeing significant for each shift to the east coast just given the challenges in the west coast and is the congestion in the imbalances and the eastern part of your network and similar to to what's been going on the west coast
spk_1: so you know there was no meaningful opportunity for us in the eastern networks during the fourth quarter of that we had to delay implementing intermodal a we serve those customers with our highway solutions but we were at we were delaying and implementing some new business in the east during the fourth quarter while our equipment was consumed in serving some customers on the west coast as we go through the first quarter we have already it
spk_17: experienced growth in the east coast and and feel confident that that will continue to add to be available to us that growth is not tied to customers rerouting to different imports that's highway conversion a business that has been available for us
spk_15: for some time now through the back half of last year we we are aware of some customers that are talking about altering their imports strategy will continue to look at what their plans are in in will provide solutions as those opportunities present themselves we certainly believe that easter network news more fluidly than what we had experienced in the west certainly in the fourth quarter but we fully expect
spk_19: the the whole network to to see gradual improvement as twenty one continues i'm not on like a note on that as well just that the great in the eastern network a good look at our sales kennedy across the enterprise we are up your of year and it accelerated in the fourth quarter so our customers asking at to solve for their
spk_0: names and channel and then are benefits of seeing the data in our platform now we recognize the number of shipment that actually should or could be moving in or model that gives us even more as we saw that number grow substantially throughout the year as well for the combination of more activity a lot with what
spk_17: in a platform that we actually moved over the highway and should be moving intermodal them to pieces i really hope as in our confidence in our plan a nice or network print thank you shall if they father
spk_15: your next question comes from the line as brian often backlit jp morgan they could even thanks for taking the question and is the fall officially on that a mammoth commentary about we can see that should be moving on the network and of and the past he said it's around eight to ten million maybe as high as of of million loads against that the congress and you think you've made in getting some of that conversion sounds like you have start to see some in the east and he you think the the service challenges as they've appeared as doesn't really really you are impaired the opportunity you feel there is to converts i'm afraid of by with a brain and so some other way daring talked about which is the opportunity for us to work across the enterprise here blending into the fourth quarter we certainly challenge pressure and from our customers from unplanned activity but also just the level of the be and not matching aditya with the capacity to the market and we did a great job across the company solving for our customers and sale think more add we did our customers need and and we applied what with the best answer based on the capacity that we can source of the a price ah and service at the customer really could work where we still thing here is a huge opportunity and in mode
spk_6: or i go back to what we see in the platform ah it is significant number of shipments that are moving on the highway that really should convert into intermodal with more fluidity and our ability to really get the network more in motion that our objective brian is really the own business look across our entire organization whether it's one talent for every their customer made we now can handle that in north america and so we're trying to solve our customers recognizing there are constraints but certainly our mission statement to create the most efficient transportation network in north america the most efficient had to move into mouth
spk_17: a we are intense working closely with our customers to do just that
spk_6: okay thanks thanks for that that maybe if follow bomb on the ice yes performance and a quarter us could have a strong sequentially your we're having a look at it but it's promptly were way up and in the looks like there's some next him back as well but i think the comments were that tab you still sticking with the second half
spk_1: productivity or that profitability turn rather made you can just breeze bridge that the difference between what happened in this quote which is quite strong and in where you think is maybe one time or is going to have often hear a little bit more seasonally says the you're going to stop them
spk_5: and at the same target be were before after such a strong result yeah thank you brian i'm feel the comment was that we would still maintains the profitability the second have the here and there's no question the with the prompted the were generated in the fourth quarter
spk_17: the we anticipated that question but the reality is that the fourth quarter of only really did have some pretty abnormal thing that drove incremental volume our way is shelley just mentioned you know our ability to say yes and and fine an answer for our customers but each and every one of them are are now reevaluating what their
spk_15: network in what their makeup of carrier nips is going to be for twenty twenty one so we we still have a work to do on our tech investments that they will be somewhat of a drag force in the first half as we closed out that the investment component and so know as we think about that they're just a little bit have a unusual death and you for that makes it very hard to predict as we move into twenty twenty one what i would say is that we are incredibly satisfied with how the the platform for four months with that now rapid growth in that rapid pressure a couple of eat and so it does fill up the wrong right track ah and we have a high out that well to reiterate our previous expectations show it on of you want anything to that really didn't a bryant that i hope that we can convert out of atheists in there are more efficient ways to do that as inside the organization that is a huge help it's harass we are working with our customers we recognize that there were and plan that
spk_17: kennedy's and class it don't necessarily make for an efficient way to me a good job in a long time having said that we are still a very focused on taking market share and making sure that we continue to grow our customers are on board and we did gain very favorable marks from our customers through out
spk_0: at the quarter and ending the year we had some of our highest ratings from customers so our ability to tall with at now we're trying to solve for overall costs for our customers and i think and summon the things that brad's rapid saying that we want to get some of his business converted into intermodal we know the each network is an easy
spk_21: he plays for us and starts and then we want to continue to work on where the platform can create benefit for our customers to we can start to grow in those new channels
spk_17: i think the cobra and jelly showing fisher your next question comes from the line and tom lead let smith he bs yeah good afternoon in their congratulations on the strong results than a brokerage an idea
spk_21: you know kids good to see that buena profitability so you know so far ahead of schedule
spk_1: yeah a question i think it does and the point that ugly john made early in the call and considering what did they can of longer term look would be i yeah you imply did the margin my outlook my come down and intermodal what about the volume outlook is that something in a you have a formal target but you know it's it's been lower the last
spk_22: you know couple years than your history it seems like you'd have a great set up for animal going growth and twenty twenty one but what he has we think about just the kind of multiyear in a more volume look
spk_1: you know maybe compared to what we see last couple years or in the past a comic described i'll go out of our respond to that and a let their and are you in l to make it kiss darkly what our messages band is your we've been be intermodal market skill has secular growth characteristics we expect intermodal volumes to outpace growth of the general transportation history and given our scale on our size our ability to serve and solve or customers' needs we expect to be able to grow faster than any her mobile industry itself will leave it at that the mean that's our long term you mean clearly when the is constrained in areas all will will perform underperformer over perform on but that that's been our methods as one makes for that was caught
spk_6: ear to the audience and opacity over there and at a thing of them well certainly and from avoiding perspective i understand that the highlight on the crushed in around particular looking back on the fourth quarter there was there was significantly more volume available to us in the market bargain what we re
spk_5: able to have handle based on lost the challenges that they were going on in and we still feel strongly and
spk_1: you know shelley mentioned it would work or bringing on customers with intermodal at the right time when we have capacity available that doesn't mean that we're taking capacity away from a commitment that we've already made as we go to twenty one we did talk about we bordered more containers
spk_6: we expect pricing to accommodate potentially are you know it is if if velocity of our rail system today is more structurally slower than what it was enough for five years ago them pricing gonna have to contemplate that when we think about invests
spk_23: men in those long term assets and so that's a big focus for us but we did highlight that were buying equipment this year because we're confident in the customers desire to buy that service so and has brad mention a me we do expect intermodal volumes to grow
spk_21: at least as strong as the industry i do think in the back out the last year that was a challenge for as particularly in the network and the waiting where we were relative to capacity demands on the west coast and as moving forward were going to have to grow were capacities available and then
spk_24: look to change operations in the markets where capacity a difficult and tried efficiency outlast and we highlighted that were engaged in conversations with a rail provider there and we do believe in both eat more efficient in the coming years out west
spk_5: only two things are forever lost and liberty mutual customizing a cancer and sing only pay for what's in here
spk_21: so that it sounds like you're saying we're not you're not reviewing the volume few for a but you arguing the margin view
spk_17: what what about out of the historical no no alert were both yeah we want to grow we're gonna grow volume in two thousand twenty one and we're going to expand margin we need to do both and the market will support both
spk_1: right work on my my followed which is he
spk_21: you know historically i think a hundred basic point you know maybe one hundred and thirty is a pretty good margin improving your for intermodal it does seem like is a stronger formula for intermodal margin performing in twenty twenty one he think you have a chance to do kind of better than historical in terms of margin prefer
spk_0: mormons and twenty one in intermodal segment
spk_25: i i think it's is too early to say whoa whoa you know that omnicom is bright you know we don't give that specific guidance the word avoid fair enough thank you for the time and next question can the line of alice and land a wet and it was credit suisse thanks and darned fallen upon i'm from a that the comments he made in response times question for you he said something about
spk_6: maybe rail pricing it out there needs to be some contemplation of that and i wanted to ask me where you said today mean obviously you have john i think in your opening remarks you're sort of alluding have something that more structural going on with with rail car and is that mean when you think about that that did fee then and the next few months
spk_26: that the intermodal right me to go up significantly more than pl rage and then the second hi my question can count as my follow up having and you're discussing with the rally around talking about for a broad be wanting to growl is or any willingness on their part can maybe a a little bit more accommodative on
spk_6: on right to sort of drive more traffic on to the networks out with you get shorty topic a are about them on the topic of the great idea
spk_1: i'll answer the last question first there's not a railroad waiting in line to lower their at the end of her own weight on that for now for the ss that's total that's not happy that i'm at
spk_27: you know ah didn't like that
spk_0: earhart there are markets where yes intermodal prices probably do need to outpace truckload rates but there are markets where the intermodal prices can be at maybe even below truckload market price changes so the it's a little bit broad to make a statement that intermodal rates
spk_28: outpaced truckload rate i don't think they do and i don't think they necessarily will throughout the our entire network but there are some key pockets were yes absolutely think they will okay thank you guys crazy it up
spk_5: your next question comes to mind as scott group lists of research
spk_1: hey thanks afternoon guys down i got a couple for you
spk_29: so first on the volume side what changed in december to allow the the volume growth to accelerate
spk_28: and do have any perspective you can share the had that continued so far as to start the first quarter and any thoughts on that and and had a think about volumes in the first quarter yeah i think i think as as pick quarter when on there was a a a small reprieve in am in our ability to to reposition amp these outlast in and that showed up in in december a little bit better than it had earlier in the quarter some of it might be related to a weakness in december of two thousand and nineteen frankly but certainly on january so far has been has been what we expected it to be in that has been demand has been strong and our network is more fluid
spk_6: okay
spk_1: and then i want to try one more on the margin side and first i think you just said it but i swear i'm excited or at that you are your i know you're not getting guidance on margins but you think intermodal margins improve this year and then the other part is that the longer term guidance or is the as we as you revisit this is this more a function of the reality of of what the margins have done the last couple years in the tougher part of the cycle or is it more a warning of don't expect the margins to get to that eleven percent plus range in the good part of the cycle meaning we we know what the passes on of are trying to think about the forward are you trying to suggest you as a we we may not get to eleven
spk_5: i don't see a around years rather get post yeah god it's okay to god i don't think we're trying to suggest anything other than acknowledged that they intermodal margin has been of a primary topic for our investors for some time
spk_1: we're coming out of the a very turbulent period shelley highlighted that gosh for three years we've had charges from arbitration where in the middle of a pandemic we've got driver hiring challenges that outsource market is extremely difficult we honored commitments to our customers and as we go through two thousand twenty one we are hopeful and and have the expectation that i'm not gonna i wanna be cautious on use and stability but certainly a lot of those challenges will will fall behind us that market certainly were is ready to support strong price increases and and we'll see what we can do i think that's been our message
spk_5: use that we'd like as a more stable year to evaluate that and that's that's really the bullet the what the message was get august and got this john that and
spk_17: there are a number of items that are we hope are behind it's like i'm trying to pay us are out a pandemic been that here in some of them at their output of that are things like i was talking to crime earlier and unlucky get some day on this to a driver availability is in a new place today and so while we're going to go to the market for
spk_1: rates to help deal with changes in evolution in our power structure could get back to that place we think we should be either way eye our being very clear because i think we have a duty to be clear that we have a chain or expectation we believe this year will solidify anymore so settle the like the term show a use settled environment now it's not a smooth environment it sort of the on the line current state of let's look at proper availability hours just referencing drivers' schools are under duress okay driver not retiring in
spk_5: schools are pulling out new driver that puts in a unique pressure it's gonna be ongoing though the things around here so hard arbitration all that we think are more spell so we get our market and we get to see the corporate willing to pay for jamie ought to provide company efforts to do dray to present
spk_1: a large fleet to have a president that concerns that can do think that we've been able to do in the past they're gonna answer that question for us through this year in their decisions around how they award business and at what rate if we can get that answer to get us back to eleven to thirteen
spk_5: now they make sure we communicate that and all the things that go with it but we're not there and early indications and conversation rihanna was shelley in the sales team and their to his team are that we still have optimism that the customer needs what we provide and it's you need by the way and we want to keep surviving yet but we need that support and we need those morning to return to achieve there were times that we've enjoyed the past and that's that's really where we are also think it's important to say it's not just intermodal margins in which was surely the purpose of that parramatta opening remarks that the whole company has a a really deep breath and look it will hurt and about we also live you were dedicated is as we split that this is that we say hey we didn't look at that that it returns of the answers required that business and we didn't make sure we're on steady and again the term steady footing for what we can present in terms of expected
spk_1: patients now into you but to our customers as we set price and as we establish contact same is true for our talk of business were looking at hey you know there's a there's a place here with the growth weeks periods in the fourth quarter in some of the nuances that were experimenting with around trailers we might be a little remarkable our capital
spk_15: thoughts in truckload that might be able to be supported by a different margin profile and unstrung it coordinate that conversation it has not a one time a van a one off i think the company has a duty to evaluate it's it's or expectations and and this is the year that were calling out we're gonna do that think we'll give you progress reports long way and and up include they'll be a lot of clarity for a frenzy with
spk_28: like just needed from my prefer from our view we have a lot of confidence in the orders we placed for both inner barrel and how services nick talk about the pipeline that he has helped our customers demand and i we have confidence that we can get to appropriate returned on
spk_0: that that we have ordered already and now we just want to make sure we understand is there more appetite and what we've already set up structurally or twenty twenty one hour tell you i think that our customers want more from us than what we are planning right now but what see that to the did season and
spk_21: yeah well established that and then to reiterate what their and said or margins will improve and intermodal and that's what we're marching towards we took care of our customers we reiterate that through the entire pandemic all three twenty twenty and we would honor our commitments and it is very much like what we get in two thousand and seventeen and two thousand and eighteen we honor dark
spk_30: commitments we came back to customers and twenty eight pin and our customers matched up with as cost to price we don't expect to change from nappa we want to walk through robin seat and to see if we should take more and more of a stance on equipment ordering password a bike
spk_17: thank you guys prescience your next question comes from the line of a net around yeah deutsche bank
spk_30: thanks hi everyone i'm following up on them a long time a large
spk_6: model the be the dead horse ah but you know i've always considered a very high return on invested capital business as we know with final miles you can have lower margins but return on capital can be very high and so i just thinking about as if you guys just maybe or possibly a just along
spk_1: tom expectation of the of the of the book burnings of the book margins of the business is there anything happening structurally that maybe allows the to rich the roic and it has now even though the margins are lower or or in offering ratio expectations were directly respond to them to the change i admit this is brad i will i'll act on are there and add add to what i am i say but you know when you think about it and if if revenue or costs for load is going on in your ear really focused on just margin percent with which i think in the next week movies is very focused on he probably pirlo goes up and contribution in and on a dollar basis per unit remains consistent or improves in the capital required to generate that contribution in on a dollar basis the same and you can achieve similar our allies see even know there is degradation and the margin so i know there's so much focus on margin percent i think be the work that will be done this year and that we're in a be trained parenting communicate with the investment community and we're going to look at all of the implodes we're going to just make sure that we are in in fact carrying what we deem to be appropriate returns on our investment
spk_5: and will update what that margin output is based upon the analysis so yeah that that's my comment aaron oh god why i the more than
spk_1: why i mean we'd set for for many years now that we read care first about our return profile and really brad i think you highlighted it that that's that's are measuring stick and that's how we're gonna think about have we been successful in our approach to managing the investments in our assets are weeks for standing a strong enough return and i'm quite certain that that's what john hold me accountable to do is to find improvements in the way that that are return profile is so that's our focus and twenty one and and and lab the comments i made earlier with we want to provide our customers with the services we currently present
spk_5: and in at but we expect and demand a proper return on that investment get the cars or says they are idle at camp as support that we've actually seen know that you mentioned foul mouthed there was a period where we were only kill my efforts and the expense related to that and martial arts for that service or
spk_31: not supported in the market so we pay that off of that offering and today we same a great broke that and being a law firm a different capital profile and can i give her margins and still present the counter retired that that weeks beggars as their said has been our northstar for a very long
spk_30: long time and it serves as well and were i'm about to abandon it so that we get back results from this big work and says a you know we can actually that eleven thirteen okay than what are we in next you know how it would look at are fleeing from lot of and consider different approaches to how we offer that service that would and up an even lower margins similar to better return
spk_21: performance and that that happened it
spk_30: yeah i think that the quality of
spk_17: relic is the right measure and
spk_30: the alarm is not really a can buy for keep relic depending on talked about the that are at that that's a good point yet fall off my god
spk_17: come on a but i wanted to ask how congestion is impacting the animal business
spk_1: volume and coughing only reason i ask as much as i look at box times at least the we we look at it it's not much lower than where was pre colvin are all this country fired all this congestion and are know you're adding more trailers this year which will help with wrote but if you could just interested
spk_6: the address you know how box times are still holding up so well when there are significant congestion and rail service because i would imagine that that's where i would have seen it ah
spk_5: and if you just talk about that
spk_1: well i think i'd take in the period of time pre cove it he saw a box turns that were similar to what they are encoded but we had significant amounts of capacity in storage that had been bought at periods of time when when velocity was challenged in in congestion existed in you know a period leading up to
spk_5: twenty nine he we had grown our fleet to deal with a little bit weaker person fighting list
spk_1: returns were supporting that as we as we came and it's wanting to what he terms were not built around the size of our fleet and are volume was not yet where we had anticipated it would be based on how large our fleet was so we were anticipating velocity and improvements in twenty twenty and a
spk_21: we were experiencing nap right up until the pandemic so relieved starting in june demand went off the charts and and everything slowed down a bit and so yeah you're not seeing any kind of significant change in turns and and that's relevant to how bad congestion has impacted the
spk_30: amount of time it takes a container to travel on intermodal loads today is longer than it was a year ago and we would expect for that improved this year or i should say it was longer in cute for we should expect that that that transit will either improved this year or the pie
spk_17: pricing will reflect that we have to the asset for a longer amount of time in order to accommodate the load for the customer and and that's our going to do it but i do expect congestion
spk_30: and velocity in our system to gradually improve in twenty one
spk_0: to what you're implying and this year them were balance between low yield and right because if your box turns improve and maybe i'm volumes
spk_32: commensurately and you get a more power dynamic volume
spk_33: well i think i think are lame this year is actually more to price that it is anything else we've got to explain or margins that we are confident in in our ability with the add the equipment acquisitions that were making in order to do that
spk_21: thank you very much appreciated
spk_32: that next question comes on the line as just and long list stephen
spk_1: thanks and good afternoon
spk_6: maybe to follow up on that that last question around rail service and velocity a he's during his their way to think about that magnitude of the margin impact we'd seen in that back as at twenty twenty hail intermodal margin had been around nine percent yeah
spk_1: a service where to get back to pre pandemic levels where with that margin shake out and carrying have that you know and the basis points of the to hundred basis points is there any help you can provide on that front
spk_32: i probably can't get to specific they're just and and i just know there's that the it when you look at the fourth quarter the amount of outsourcing we did what significant on a drainage front we had employees of our own in quarantine nothing jon kuhn mention how much the company had spent on p t o related to coven time at it for our employees yet we're replacing the capacity that that employee was gonna present by go into the open market and bringing outsource cost that were significantly elevated in two thousand and twenty and so
spk_34: that's that's some of the major drivers that margin challenges in the fourth quarter service and velocity is a component of it
spk_15: but but really and in in in the back half of last year and particularly in the fourth quarter dray it's cost increases as we had to go to the outsource markets were significant how can an asthma follow up i just wanted to ask if there was any update to the quarterly hayden have the repricing i you expect in and of intermodal and a contractual business and and i yeah can you did i help us with where we had today in terms of what's been repriced in and how ah the remainder of a bit then kid progress on a percentage basis herself
spk_32: for the most part of the company policy similar trends and or metal a little bit different ah on how much has been tried so far but if you just like it typically we started season and keys for and that's kind of what we deem as the start about ten percent of our business or sell starts and that time here particularly in intermodal ah as who is putting their beds out is more impacted in our intermodal segment but as you move forward with price about thirty five percent of our business between thirty five and forty percent
spk_0: i ever been as of that somewhere in the mid team had been awarded and very little has implemented a little more and intermodal and already implemented a you just a look at dinner model big event like as she won around twenty percent you to around thirty five percent to three around or a and keyboard around
spk_30: and it's it's in that range depending on when customers come out with her actual bed some punk that changes but that's about the right timing okay great another all numbers has presented in there when implemented cracked lot
spk_15: yet am very helpful thank you for the time your next question comes from the line and huckster with bank of america a god can afternoon sell your bread at dartmouth an earlier on in a modal that that january is expected in a fluid network and and we saw the spot market up and i see a one hundred four percent in in the spot loads and seems like we're going to he working through the chinese new year at the ports and and low inventories can you can you kind of talk about how you see the man trending and in
spk_19: early twenty one and maybe overall segment us
spk_30: yep so from our customers view inventory is still an issue and we do see the labour challenges particularly coming and down on the employers' side it i would say it's been a little bit slower than anticipated here for the last seventy came days but the forecast really cut that bad
spk_1: why am i particularly when you look at what's happening from an important in total volume we do think that our customers will continue to restock all the way through the first half of the year i and i'm not sure how much of a full of had we're actually going to see from chinese new year i'm considering that there is a backlog of containers that are trying to come into the poor and trying to turn and get out to be deployed i think that that will move forward as we come into what would typically be a wall we do think the west coast will be tighter than usual from a seasonality perspective and that will push forward into the rest of what's happening in the truckload market i would say spot price in general has fallen over the last seven days matching what we've seen from a demand perspective bed i don't think everything is out of the norm and still anticipate a stronger than normal first half but it just to clarify what with the little slower and the last seven days with that that any particular business or just tropical from an elephant just across the board our customers trying to get report from an import perspective
spk_35: and and in in dedicated nikki mention the margins now in the mid teens are you noted eight you two thousand new trucks is that business that you you you're confident is sold in committed is that as new rate me you could talk a little bit about your your thoughts on a gone for the dedicated
spk_0: yeah
spk_14: that is business that based on our pop line or pipeline in january both and dedicated allow a stronger than our papuan january of last year so we feel very good about our problem and those number so not signed deals your ah but it by phone power pop one blows we go over
spk_13: i'm confident in that eight hundred thousand new trucks next year and game it's grab the that's just you know you remember the bids the pandemic in providing some context that he god because of the pandemic would have a lower the expectation to sixty eight hundred granted you get a gates on thirteen and
spk_36: der and thirty one trucks in in twenty twenty
spk_17: yeah the next comments was with the at work and just returned to the sort of long term target of trying to get eight hundred two thousand
spk_1: this project with myth of getting your next question comes from the line of brandon a glance key west barclays
spk_5: has a good afternoon intensity my question i'm i guess on the i see a thing that you know i guess is still the computer improbable by the second half of your is the tragedy they're still incremental levers of put a new transactions on the platform and what about the existing brokerage business as well as part of our strategy will i have a possibility of really
spk_6: i am transit in that business on to the three sixty platform and then you know have you read purpose or your head count in that division to be more efficient or a more dismal well thank you
spk_17: it ran an
spk_1: we've been transitioning are people through ah moderate to severe reorganizations over the last eighteen months really in anticipation of what the forward model will be a lot of that work has already occurred
spk_15: really it's about finalizing art art pack development so that we can maximize our own efficiencies well with the activities that are on the platform on that there's no question that we expect to continue to grow and grow volume we touched on a little bit earlier that you know the abnormal spot volume i will look for a more efficient way to transact and twenty one and that's okay but we know we have to have a lot more momentum focused on bringing on new customers predominantly at the small and midsize shipper level to help us continue to fuel the platform and that's where we live we think about second half it really is the culmination of the completion of the tax band am that the pill it of overall volume an activity on the platform big that the it's swain that bathtub the profitability of we not allow now what we saw ideas and you for was the what amplified into the extremely abnormal a high level all your revenue of you will have spot but and they did it in lives that will be will we get there we're not anticipating that sprang up a theory really oh over the first few months if it continues to say ad heart of a market that them the deserves a chance to that could occur a little bit earlier but we're not talking about your day one we're talking about months not quarters there so i think that just reaffirms the second half and i competence on our ability to to deliver the part of it randomly lovey make a new to dead and during the first half of last year we talked a little bit about the reorganization and we talked about that we had resourced are people that actually start calling on customers and earlier in my comments i talked about our activity levels being absent financially throughout the year that's
spk_37: a direct result of a reorganisation so we body started to see benefits from the platform in a portion of our i'd see as segment our focus has been at really making sure that we complete our internal worked for our people and that's what brad is referencing we are
spk_1: continuing to make investments were letting our customers and her carriers drive as on how to create a more efficient way to do business in both it that spans and now will be ongoing however we will complete the internal work that will actually married the at tournaments a should have three sixty
spk_0: platform with our internal resources and think of an automated shepherd they'll actually come off of a conveyor belt and you will to are people we really need to problem solve today that operate into silence insert start to see the leverage the happened inside that and then last night i'll make on i see as returning to profit
spk_14: ability and the second half certainly weren't trying to march towards repeating what our fourth quarter performance was so we've not given up hope that we can continue and key one an enzyme q to but without specific ideas earmarked for our future in there that
spk_21: he added could put pressure on as but we will continue remember our strategy is to i continue to invest in our people and in our technology to that we can scale the plaque on scale of the most critical component and creating a more efficient network and for that will be our focus through the
spk_14: i have additional if we can outperform like we didn't inform i think you'll be played with as results
spk_6: appreciate that shelley thank you i gather we have time for one more question final question concerning the line of attack fowler with keeping capital market
spk_17: okay great thanks and good evening i guess the good news is probably said on the other margin commentary so at the last question will be on the on
spk_6: the there and i guess maybe i'm you know to some of the comments about the timing of the the bit implementation into twenty wine
spk_1: do you think the you'll be able to show margin improvements in the first half of the year or is it really a function that you need to see the bit more fully implemented and in the rail service to improve to get the that margin or progression margie improvements kind of in the second half and for one right to exit the year
spk_38: well i think i'd be some elements outside of our control can influence that skill given that we are still facing some pandemic
spk_14: conditions out their labor continues to be very difficult i'm not sure exactly when i know that of them
spk_15: you know we're implementing pricing in shell he outlined it a it moves a little slower than maybe maybe we would like for it to certainly at this point but but i would expect by sometimes i'm to to how new price is implemented so back and after the second quarter into the third quarter you've got a substantial percentage of your and of you book a business with new fresh rates based on the conditions today and that should be better representative of the pricing more did in the results okay that helps it isn't maybe just a close out the call you know she'll you think about coming to the end of the spend on on three sixty as you look out beyond the second half of twenty wine is your expectation that three sixty provides you know above market growth just a nice to yes orkney see stronger revenue growth in in the other segments a how much of it's really predicated on seeing revenue growth is lowering costs just gonna have you see three sixty coming together as you move you know kind of beyond you know the the moment asian in the spend pays the even going to go the last couple of years thanks from the thought every
spk_17: great question that's one of the things and my expanded role to really think about how do we leverage the platform across the organization and so i'll be able to really focus and on a how we do that on behalf of our customers so if you think about the work that i'd mentioned earlier that in a platform for data that be moving intermodal how we get warm
spk_1: restricted on and fun and of that instead of running report after would actually making the recommendation and nudge predicting a polish event or recommending hardship and can maybe that's just one example that many that we see across the organization and it wouldn't make sure that i clarify something we are not at the end of our tech spend we aren't as about internal work that will connect our external platform with our internal but on we will continue to invest in jp had three fifty as we've seen that that them accelerator for an organization from a read your perspective i think you're able to see that and jp he denied the exit of earth place that we started our three sixty platform it was really the plane that would logically adjacent to the work that we were doing it for we really through the benefit their but you'll continue to theory thinking it's why he makes his opening comments were marched around the platform and how we will leverage that and then family i think it is up there in our annual port that number of million
spk_6: them out that we eliminated from our assets are leveraging the platform we directly back to see that in cost reduction and a more our platform scale the more our own outfit should be the most efficient and there are certainly at the top of the most efficient at had available in the market for continuing to
spk_1: try to drop off on behalf of our customers
spk_5: yeah okay great thanks again for the times night everyone
spk_1: do i wanna do pick a minute here and closes up little bit of our tom very for your patience for hope we got from most questions i can say definitely the there's a sense of urgency for us to get this a margin question answered because it so dominates are discussion we really don't get a chance to talk about the more comprehensive advantages that we have and there's a lot of discussion in our remarks about platform enterprise companies solving problems for customers that that really use all the parts and so it's important that we hear the the volume on this question and i think
spk_5: we're we're gonna work hard to make sure we get better result is as soon as we can but where we are in the use of our systems is encouraging force and revealed itself alive think in the fourth quarter of think our customers look to jay be hard to get answers they don't look for us to buy services a
spk_1: find an attitude here and investment here a mindset that is a call us we will help you figure this out and we are on from preserved entrepreneurial enough to allow ourselves to find new ways
spk_5: that is a very important element that is is longer term in nature doesn't affiliates of the media legend but highway plots intermodal was dedicated was fall amount of platform excel or is jay hot and it's a strong position ran the settled nature the are go forward into twenty one gives us a as the good changes were going to have to answer these questions and we're going to answer
spk_0: whether we like the it's are not word answer the questions and i i know this commitment their i'm excited that we got to place we get adequate minimal i think that's very important thing to take away it's fleet will be over a hundred thousand units in twenty twenty one and as a as a provider of services and value to come

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