Schneider National, Inc.

If you would like to withdraw your question, again, press the star 1. Thank you. I'd now like to turn the call over to Steve Bindas, Director of Investor Relations. You may begin.

Thank you, Operator, and good morning, everyone. Joining me on the call today are Mark Org, President and Chief Executive Officer, Daryl Campbell, Executive Vice President and Chief Financial Officer, and Jim Filter, Executive Vice President and Group President of Transportation and Logistics. Earlier today, the company issued an earnings press release. This release and an investor presentation are available on the investor relations section of our website at Schneider.com. Our call will include remarks about future expectations, forecasts, plans, and prospects for Schneider. These constitute forward-looking statements for the purposes of the safe harbor provisions under applicable federal securities laws. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from current expectations. The company urges investors to review the risks and uncertainties discussed in our SEC filings, including but not limited to our most recent annual report on Form 10-K and those risks identified in today's earnings release. All forward-looking statements are made as of the date of this call, and Schneider disclaims any duty to update such statements except as required by law. In addition, pursuant to Regulation G, a reconciliation of any non-GAAP financial measures referenced during today's call can be found in our earnings release and investor presentation, which includes reconciliations to the most directly comparable GAAP measures. Now I'd like to turn the call over to our CEO, Mark Roark.

Thank you, Steve, and hello, everyone. Thanks for joining the Schneider call today. For our prepared remarks, I will provide an overview of our framework to drive structural improvements in our business, and enable us to seize the opportunities ahead. Then I will share insights on our recent dedicated acquisition of Cowan Systems, offer my perspectives on the freight market, and discuss our results and positioning across our multimodal platform of truckload intermodal logistics. Daryl will then provide a financial overview of our fourth quarter results and discuss our assumptions for 2025 full-year earnings per share and net capital expenditures guidance. Then we'll take your questions. Let me begin by emphasizing that we remain committed to driving ongoing structural improvements in our business by restoring margins, improving resiliency, enabling growth, and enhancing financial returns. To accomplish that, we continue to follow a framework that includes four tenets, all equally important. Our first tenet is optimizing capital allocation across our strategic growth priorities, which include dedicated, intermodal, and logistics. The second tenet is managing the customer freight allocation process with purpose and discipline. By carefully selecting and managing our freight, we can ensure that we are serving our customers effectively and profitably. Next is delivering an effortless customer experience. We aim to make it easy for customers to work with us by providing optionality and value across our multimodal portfolio. The fourth tenet is containing costs across all expense categories. Cost containment is critical to our overall business strategy as it enables us to reinvest in growth initiatives and enhance our competitive position. Turning to the fourth quarter, programmatic acquisitions complement our organic growth objectives. And on December 2nd, we were pleased to announce the completion of our acquisition of Cowan Systems. Cowan is our third and largest dedicated acquisition in as many years and aligns with our long-term strategic objective of providing customer-centric dedicated solutions as the cornerstone of our truckload segment, while broadening our vertical market reach to provide greater value to our customers and shareholders. With the acquisition of Cowan, 70% of our truckload fleet is now in dedicated contract configurations. This compares to 33% in 2017, our first year as a public company. Cowan fits our acquisitive profile as a successful, well-run, family-owned enterprise with a highly compatible culture and a track record of providing excellent customer experience that drives deep loyalty. In keeping with our proven acquisition playbook, Cowan will retain its brand, operating independence, and leadership. As primarily a dedicated contract carrier with a portfolio of complementary services, including brokerage, port and intermodal drayage and warehousing cowan utilizes a hundred percent lightweight equipment model and serves the attractive end markets of specialty retail food and beverage and construction building supplies all of which take advantage of the increased payload capability the transaction price was 421 million including 31 million of related real estate In 2024, its pro forma operating revenues were $629 million, primarily composed of dedicated, which operates approximately 1,900 trucks and 7,600 trailers. Cowan was accretive to earnings per share in December. We expect between 20 and 30 million of annual synergies after year one. The synergies are largely from the integration of administrative and support functions, including equipment purchasing, maintenance, and fuel. We expect to benefit from these synergies as early as the first half of 2025, with the benefits exhilarating in the second half of the year. With the Cowan acquisition, we see ample opportunities for growth across multiple verticals and geographies, and we will allocate capital to organically grow the business and enhance returns to shareholders. Now let me give you my perspective on the freight market and what we are seeing from our vantage point here at the end of January. The fourth quarter largely played out to our expectations. Seasonality, which began in the second quarter, was even more evident in the fourth. Carriers are still not being adequately compensated for the value provided and the cost to deliver, resulting in continued attrition of supply. Declining capacity across current demand that more closely aligns to seasonal expectations is bringing the supply and demand condition closer to equilibrium. the quarter we experienced solid retail and consumer product driven volumes that were partially offset by extended seasonal auto production shutdowns while there were pockets of pulled forward import volumes to address concerns with tariffs and potential port labor strife this was not universal across our customer base so the impact this will have in 2025 is difficult to quantify starting around thanksgiving spot price exceeded contract price can accelerate through the end of the year and into 2025. While the trend is encouraging, we are far from satisfied with our results. We continue to take actions to restore performance within our long-term margin targets. These actions include executing the allocation season with purpose and discipline for profitable growth, reducing our cost to serve, and growing our variable cost network capacity. We are very early in the freight allocation season, but we are finding that customers are more receptive to rate restoration than they have been the last two years. In addition to recovering market conditions, the fourth quarter benefited from the cumulative effects of the action we have taken throughout the year to expand margins, which resulted in year-over-year improvement in earnings across all reportable segments for the first time since the second quarter of 2022. Our actions also position us for outsized leverage in an improving freight market. Turning to our segment results, and I'll start with dedicated in our truckload segment, our dedicated business has demonstrated resilient earnings profile over freight cycles. It is an important part of our strategy to create enduring shareholder value. As we expected, there was limited organic startup activity in the fourth quarter. have line of sight to several hundred trucks of new business awards slated for startup in the first half of 2025. our new business pipeline remains strong and we are adding additional commercial resources to advance the opportunities we have in front of us in addition to overall truck growth we expect enhanced dedicated revenue per truck per week due to two separate influencing factors the first is that we are tightening our truck to driver ratios in our three acquired companies in redeploying the underutilized capital to new startups. Second, we had trucks at the ready for a few large startups that were customer delayed from 2024 into 2025, which we can now effectively deploy. Our truck network business continues to be challenged. We are on a path to restore profitability of this business through internal cost control and productivity actions, adding variable cost capacity and rate restoration that aligns the value we provide in the cost to deliver our exceptional service in the quarter we achieved sequential earnings improvement driven by cost reductions and rate performance that was at expectations as we continue to work to attract more variable cost capacity this improvement was achieved while overcoming the impact of insurance expense which i'll talk to you in a moment looking forward as freight conditions recover Our network business, which is more sensitive to market cycles, will benefit from supportive pricing environment and enhanced asset productivity. Enterprise results for the quarter include $7 million of prior year accident reserves, an impact of $0.03 per share, most of which resides in truckloads. In 2024, Schneider achieved significant reductions in our DOT reportable accidents, attaining an all-time low accident frequency. At the same time, the industry has seen a surge in litigious activity, including litigation funding, nuclear verdicts, and inflated settlements, which have increased the cost and volatility of claim reserves, as well as insurance premiums. Our number one goal is to lower the frequency, as this is the first line of defense against rising settlement costs. I am proud of our driver community, our operations and safety teams, whose actions continue to reduce frequency of claims, therefore lowering our overall risk profile. In our intermodal segment, we hit the trifecta with year-over-year growth in orders, revenue per order, and improved productivity. Year-over-year, intermodal orders were up 3%, revenue per order was up 2%, and margin improved 380 basis points. Our disciplined and balanced approach during our customer search period drove enhanced operating leverage into our business, and it resulted in an exceptional service experience for our customers. Continued intermodal cost reductions, network optimization, and improved rate productivity all positively impacted the quarter and our position as we enter 2025. In the quarter, hurricanes created sporadic service interruptions in the east. the west the uni pacific experienced disruption for a few weeks early in the quarter however we were pleased with their recovery and ability to surge volumes with improved service consistency turning to our logistics segment we delivered another profitable quarter logistics continues to manage net revenue effectively while conditions and brokerage market are challenged from an overall available volume and carrier cost perspective An order volume count contraction of only 5% was mitigated in part to our Schneider Freight Power Platform and our people. Our power-only offering continues to resonate with customers, and our industry-leading technology has allowed us to lower our cost to serve. In summary, the freight market is continuing its path toward recovery, and we are playing the long game. We are committed to driving structural improvements across our enterprise by restoring margins and enhancing financial returns. In 2024, we took a balanced and disciplined approach towards positioning our business for through cycle leverage, growth, and resiliency, and our actions gained traction as the year progressed. Following our framework and focusing on our strategic priorities enables us to drive improvements in our business and seize the opportunities ahead. Let me now turn it over to Daryl to discuss fourth quarter financial results and our 2025 guidance.