J.B. Hunt Transport Services, Inc. (JBHT) Earnings Call Transcript & Summary

All right. Good morning, everyone. We're going to get started. For those that don't know me, my name is Allison Poliniak, I am the senior analyst following Industrial Technology and Transportation. We're excited to have J.B. Hunt with us today. We have a few people from J.B. Hunt, Shelley Simpson, the company's President; Nick Hobbs, COO and President of Contract Services; and Eric McGee, EVP of Highway Services. So Shelley, why don't you just give us sort of a brief overview of J.B. Hunt for folks.

Yes. So we are a North America-based transportation and logistics organization. So I'd like to think with our customers about how we can move their supply chain more efficiently. So we have 5 business units that really span across the supply chain that really think about bringing induction into the supply chain, which would really start with Intermodal, our largest part of our business, all the way to final consumption, including your personal home, which would include our Final Mile business. We have 3 other business units, Dedicated Contract Services, our Truckload team and our Integrated Capacity Solutions team. If you looked at our organization in total in 2022, we finished just under $15 billion. We have been on a growth streak over the last really couple of years through COVID as our customers really leaned into our ability to solve really any need they had within the supply chain from our 5 different business units. And so for us, when you think about where we're positioned in the market, from a business-unit perspective. In the Intermodal business, that is our largest segment, about 50% of our overall revenue and certainly generates a lot of our operating income for us in that segment. We are positioned as the top provider inside that segment as well as our Dedicated Contract Services segment. Both of these segments are really the businesses that produce the most amount of operating income also requires the most amount of our operating capital as a result our highway businesses, which are both JBT, that's going to be our trailing side of the business is going to be the only part of the business is asset based. So on the trailer side, we actually use the power of other companies to create a more efficient movement of goods with trailers. And then we complement that with our ICS business unit which is purely brokerage in total. Both of those really run together, that's actually what Eric McGee leads for us by using our digital freight platform, J.B Hunt 360. So we're one of the largest digital freight platforms and also one of the largest Truckload providers. And then finally, in our Final Mile segment, about $1 billion of our business. That's been a business unit that we have been doing tuck-in acquisitions and really building over the last several years, that business is also positioned really at the top of their industry. So for us, we really want to give our customers the best answers on their supply chain and really achieving our mission statement, which is to create the most efficient transportation network in North America.

Great. So a big topic of conversation, probably no surprise to you yesterday was, where are we in the freight cycle? Do you have any color? Are we bottoming? Are we seeing some green shoots? Just any color on order and recent trends?

Well, so in our fourth quarter earnings release, we did talk about that we had entered into a freight recession. I don't think [ we ] got a lot of headlines. I'm not really sure why. And then we repeated it in Q1 and boy, it became like the top headline that we said we were in a freight recession. So one of the things that we commented on is that we did believe that we would be in a freight recession continuing into Q1. And that Q2 would get -- start to have somewhat of a recovery. We did talk a little differently about that in February as our customers are still very optimistic about what the year could hold, we just feel like that our customers don't have the level of data that we need based on our own experience and history to have the same level of confidence. So albeit we're not negative on what's going to happen. We just don't [ give ] the same level of confidence before we see more data and get more confident over a longer period of time overall. So I would say this, we have a few pockets where it's getting a little bit better. And so you have to kind of think of our business in 2 areas, really think of Nick, who leads both Dedicated Contract Services and final Mile for us. Think of his Dedicated business. That's kind of at the end of the consumer. So point-of-sale business really does replenish. Nick's business -- I think, Nick you called it steady.

Steady.

And so that, to me, is kind of what the consumer is doing. Is in a more steady state based on our Dedicated Contract Services area. Then you look at the replenishment part of the business. And that's the business that's experiencing a freight recession. In that part of the business, all of our -- all 4 of our other segments are not immune to that. But we are seeing, I would say, pockets of where we feel like things are moving along. We couldn't call whether the freight recession is going to end this month or 3 months or 6 months. But for us, we're just trying to build our business, thinking long term on behalf of our customers, manage our costs based on short term and what we understand from a short-term perspective. But really too early for us to call anything at this point. I would tell you, we haven't seen things worsening. That's a good thing. But I think that's a good point. And I would say that's more around demand that I'm speaking about.

And Nicholas, keeping with you, with Dedicated. How is the pipeline looking? Are people not as interested in Dedicated now that the big crisis is over? Just...

A couple of things. I would say on the Dedicated. Our pipeline has actually picked up a little bit from where it was, let's say, a quarter ago. And so it's pretty steady, pretty consistent with where it was last year. What we've seen change is the decision-making. So the Dedicated that we go after is private fleet, so a little bit different than some of the other trucker friends we have. And so when we go after those private fleets, those are always out there, but the decision-making we normally say it's 18 to 22 months from when we start engaging until they make a decision. We're seeing that take a little bit longer. And also our hit rate or our hit rate or our success rate is down from where it was. So just the uncertainty of what's to come. People have made decisions. So still we're still going to sell somewhere gross sales of trucks is between 1,000 and 1,200 trucks, and we'll hit that sales target this year, not near what it's been in the past 2 years, but still a very good sales year for us. So we think that those sales are still coming. And what we've seen so far, we're on track to do 1,000 to 1,200 trucks in Dedicated.

Nick, can I just make a note on that. You mentioned not what we've [ done ] in the last 2 years, but your growth plan this year, how would that compare to previous years?

Our growth plan is probably -- well, I don't know if you're talking to budget or what you're talking about there, but...

Just the number of new starts.

Yes. The number of new starts, we will be in that 1,000 to 1,200 from sales, but our existing fleets are all down, going down 2 or 3 trucks because of customer demand. So when you look at net year-over-year, we're going to be flattish, this is where we're going to be year-over-year on truck because we've had a lot of extra trucks because if you look at -- we couldn't get new trucks, so we held trucks past their trade cycle. So we had to hold extra trucks in there. So when you net that down, we're going to be right at about the same truck count when we come into this year, where we went out with new sales.

Got it. And then let's keep with Final Mile, right? We're not ordering Pelotons anymore. People are really concerned that business is falling apart. Maybe talk to the dynamics there and sort of your longer term -- near and long term view on that.

Yes. So near term, the demand is clearly off. So in our Final Mile business, it's made up of appliances. And appliances are down, some depends on the customer -- our customer. Some are still doing pretty well. Others are very slow. So -- but appliances net are down some, furniture is off dramatically. People bought a lot of furniture during COVID. And so they backed off of buying new furniture right now. A lot of that has to do with the supply chain because they're still having the same type of furniture, same design that they had 2 or 3 years ago. Inventory built up, they're trying to sell off. So there's -- until they get some new designs in then that should pick up another year or so, hopefully, furniture will pick back up. And then the exercise equipment, demand is clearly off for that, but we are picking up market share in there. So you'll see some growth from us in that from just getting market share because of service. And then the other part of our Final Mile is off-price retail. So think of T.J. Maxx, Ross, Burlington, that type and that's where we run DCS that we bring aggregated stuff in, combine it into Truckload and go out to stores. That business is, needless to say, picking up a little bit for us because it's the season that we're at. So that's kind of where we're at. So when I think of big and bulky, into the home, that portion is down quite a bit right now. And so we'll see when the consumer jumps back on the bandwagon.

Perfect. And Eric, we're not letting you off the hook at this. JBT, ICS, how do you see this cycle evolving? One of the comments we heard yesterday is it's not going to be demand, which obviously we're hearing today as well. Is it going to be a supply of where we see is more of the supply coming out that kind of solidifies that business a bit more?

Thank you. I think first, what's probably important is kind of distinguished between JBT and ICS for us, if you think about the broader market that J.B. Hunt goes after, it's about $650 billion, a little over half of that is in the Truckload space, which falls into my area, which is highway you take that a little deeper, it's about half in the drop trailer space, which is JBT and about half is in the live space, which is our brokerage, which is ICS. So obviously, we're the most impacted inside the market. If I think about which area is less impacted, it'd be the drop-trailer area, which is more similar to Intermodal. It's a larger lanes, denser lanes, larger customers, typically. Our network growth there has been strong. We have some projects that we moved during COVID for some of our customers that are near and dear to us. That were power only that took no assets, that's kind of muddling some of the volume numbers you see in there, but I'll tell you, we're taking market share when it comes to the drop-trailer space. So we feel good about how we're positioned there. We're growing. We have equipment to be able to really accelerate for our customers. On the brokerage side, it's the most impacted. The spot market has been challenged. The transactional market. We -- we're positioned really well. I'd say going through COVID to be responsive to our customers' needs that ebbed and flowed. But coming out of that and the quick pivot left us probably a little overexposed in the spot market and needing more of the published business. So we're progressing through the bid season right now. We're seeing growth come from that. We'll win throughout the bid season and we'll probably look forward to another bid season in '24 to help us position our published business there even better.

Great. So we have to talk about Intermodal, right? Demand is certainly down, but rail service is getting better. How do you see that cycle evolving for Intermodal right now?

Well, first, we'd love to talk about it. So we don't have to -- we love to that as well. And so I would say Intermodal has been impacted with the freight recession very similar to way the other parts of our business, non-Dedicated, have been overall. Rail service is improving. And so we've seen a nice recovery, particularly on the Eastern network. All 3 of the major railroads that we use, Norfolk Southern, CSX on the East and then BNSF on the West have all improved. But we still have some improvement to go in the West Coast, but much better than what's happened over the last couple of years. I would tell you, from an Intermodal perspective, we are really excited about our long-term growth story inside that segment. I've served on our executive leadership for the last 16 years. And previous to this role, for most of that time, I spent time with our customers. And so I would tell you, from about 2016 until really early last year, a lot of discussion around PSR, reducing lanes that would be available, a lot less about solving on behalf of our customers. And that tune has really changed from a railroad perspective, but also the way we talk with our customers as well. We're very thankful that all 3 of those railroads are led by commercial-viewing CEOs. So all 3 of them came from a customer view stepping into the role over the last couple of years. And really, they leaned into us more, I would say, at least I'll just speak from being an executive role more this last year than I've ever seen. In the last 16 years. So I think that's saying something about growth prospects and what's available. We do know from how much bid work we do. Eric, I think, said earlier today, he bids about $120 billion of freight, we recognize that there are millions of shipments on the nation's highways that need to convert into Intermodal. So one thing we're trying to do, Allison, is really think about what we've publicly stated last March, which is we're growing our Intermodal fleet to up to 150,000 containers in the next 3 to 5 years. So now that would be in the next 2 to 4 years. That's based on what we believe is available in the market where our railroad providers are at and what our customers are telling us as well. So we're trying to balance the current freight environment, along with making sure that we are prepared and ready for our customers. If Darren Field, we're here, he's our President of Intermodal. He would tell you we're a cold spring, and we try to think of our customers making sure that we're prepared and we're ready. It's not a matter of if we're going to come out of this freight recession, it's a matter of when, and we want to be prepared and ready in all 5 of our segments to really be able to take off with our customers. So that's important to us as we're trying to manage and maneuver through kind of the current environment and where we're at.

When you talk about modal share, could we be in a scenario where you start to recapture some of that modal share with the service getting better and people moving to Intermodal. That could [ extend ] that decline in some of the freight volumes that you're seeing out there today?

Well, I mean, certainly, that's part of our planning process. So we're bringing in a lot of containers overall. And we're trying to make sure that we think through how many do we need this year. If we think about our bid season, although we budget for a calendar year bid season, for the transactional part of the business, which should be Intermodal and all of Highway, really occurs from July until through June of the next year. So we're always on a half-year cycle. So we're just getting ready to wrap up this season with our customers this year. We're trying to project what growth that will look like. That helps us establish what we should be doing in total from a growth perspective overall. I think for us and with our -- with the railroads, that growth is going to be more significant. We would not be investing the amount of capital that we're investing into Intermodal if we didn't have good confidence from the railroads and also good confidence from our customers. Our customers are hungry for Intermodal. They have been hungry for Intermodal for a long time. They've mode shifted to Truckload or haven't moved into Intermodal because of inconsistency in service in total and available capacity really over the last couple of years. We see that changing. We see our customers changing. As a result, I think as we come through this freight recession, you're going to see us taking share off the Highway into Intermodal, have a lot of confidence that we'll be able to do that.

And then I would say 2 of the pushbacks that we get around Intermodal specifically is, one, there's too much capacity, right? So is that going to create sort of a pricing pressure on that. And the second piece is, obviously, Truckload pricing is down, likely down again next year potentially. What kind of pressure does that add for you guys on the Intermodal side?

Well, I think those comments around there being too much Intermodal capacity is very short term in nature we tend to not manage our business for the quarter or even for this near term, we try to think about the opportunities that exist with our customers over the long term. So clearly, we don't believe that we have enough equipment to be able to convert enough shipments over -- into Intermodal off the Highway. So for us, we continue to maintain our growth story over the next 2 to 4 years. From a price perspective, here's kind of what I would say. We're finishing our bid season. There has been pressure on price pretty much across the board, non-Dedicated and maybe, to some extent, non-Final Mile so think of Intermodal and on the Highway side. I would tell you, if you looked at our first quarter results, we actually grew Eastern network. And so think about the price pressure that was happening in the Truckload sector. But yes, Intermodal, we were able to grow on the Eastern network. I think that's an important note to make is that even in an environment where there is price pressure on the Truckload side, there's still a more efficient way to move goods. And that's how we're talking to our customers. Having said that, we're going to be finishing up Intermodal bid season. Most of that will be implemented by the end of this quarter, and that will be fully effective into Q3. We're not certain when we're coming out of a freight recession, but certainly, prices are resetting. So as we're coming into Q3, prices will be different in Q3 than what they have been here in the first half of the year, but still very confident about what return on invested capital that gives us over a long period of time. And so that's really how we're operating and thinking about our business. We don't look at just what the truckers are doing and change our price in Intermodal as a result to that. We also don't look at the amount of capacity we have and change our price. We really try to think about what makes the most sense for our network over a longer period of time, how do we build the right level of density and how do we have the right return on invested capital. It's really the way we manage our Intermodal business.

That's great. And you touched on East Coast, West Coast. Clearly, the East Coast ports, we're gaining some share, just given the challenges in the West Coast. Is that good for you, indifferent, bad? Is West Coast ever coming back?

Well, I mean, I think what's really great for us is we have answers on both the Eastern network and the Western network. So if East Coast is gaining share, and we can talk to our customers about that, there's a lot of freight that's on the Eastern network, clearly by our results in Q1. But certainly, we would like the West Coast to start to rebound. And I think that's really important if you look at what's happened on the imports into the West Coast. It's been hit the most dramatic in total. So certainly, that impacted us. Our volume is not down near as much as what's happened on the import side, but the Western network is very important to the overall Intermodal network. Still, as you continue to look at what's the best way to import goods into the U.S., L.A. Long Beach still is a really great and optimal answer. I think some of that has to do with just some of the negotiations that are occurring and confidence that our customers have. But I do think over a longer period of time, customers will continue to come back into the Western network, but they've been working on that for a period of years. I would say both of those scenarios are good for us as well as Mexico emerging and continuing to have nearshoring into Mexico, that's good for our business as well.

Nice. So I want to touch on J.B. Hunt 360. What drove the decision to build that business? And how does it benefit J.B Hunt in the long term?

Let me let Eric kind of start there maybe at the top how we thought about it, and then -- I'll let you kind of go into that.

When we think about J.B. Hunt 360, what it allows us to do is connect the capacity inside the market. And if you think about over the last 5-plus years, the investments that we've made and what it's positioned us to now, we've connected to over 1 million trucks inside the market. So if you think about solutions for our customer, if we're wanting to build the best answer for them, it's either trying to go to the customer and try to convince them that the truck that you have, that you own is the best answer or one of the trucks inside the market is a better answer for that customer. So the ability to put J.B. Hunt 360 to connect the shipper, we really created a shipper-facing door for customers that is to come in and be able to view their shipments get visibility, tracking, tracing, input loads, connect to our company. We've built the same thing on the carrier side. That's something I'd say the carrier community never had was the information, connectivity, visibility, and it gives them the opportunity to come into what we call the marketplace, which is the interface of Shipper 360 and Carrier 360, be able to interact, and it provides a more efficient answer for our customers and a more efficient opportunity for our carriers to be able to spend more time driving, less time on the phone, more time making money and really focus on service for our customers. And so I'd say really trying to drive efficiency both for the shipper community and the carrier community is what drove us to build out our 360 platform. We're excited where it is right now. We feel we're poised to continue to grow and build density I think this thing is key for all of our business units. It really spurred out of ICS, I'd say, but the 360 is an enterprise platform. And all of our 5 business units today benefit by what is inside 360. I don't know, Shelley if you...

Yes. So I think that's really important as we operationalized it first in ICS. And that's because we felt that there was a better way to really move shipments by connecting more quickly and finding the right truck on the right load at the right time. And so it was a really great solve not only for our customers but also for our carriers. But as we started evaluating freight and kind of how shipments move with our mission statement, creating the most efficient network, it's important that all 5 of our segments really participate, and then we have a good strategy behind that. So as we start to think about what we're doing with Intermodal, for example, that's a really great example where our customers now have access and understand what is the best way to move goods in Intermodal through Shipper 360. And so that connectivity that we're having. So all of our intermodal dray work with our carriers actually is conducted inside 360. So is all of our Highway part of the business. But then also maybe the last part, one of the things we're doing in 360, you know about it from an externalization perspective, so how we externalize it and commercialize it to our customers and carriers, but it's actually our internal system as well. So if you think about what we really tried to design, and we're still implementing, as we speak, is really designing the future of supply chain technology. So Stuart Scott, who is our CIO, and we onboarded him in 2016, first time we've onboarded an executive externally. And Nick, I don't know, 20 years or longer? We intentionally wanted to bring in somebody from the outside that can help us think about how do we do both. And so we thought about our system from how do we reimagine it for the next 20 years. And so that system is actually empowering our team internally. So the way we think about it is the same system that -- we're operating a multibillion-dollar company is the same system our customers and carriers get access to, and that's the way we connect J.B. Hunt 360 overall. So in this freight environment, one of the advantages that we have is that one of the largest trucking fleets in North America is J.B. Hunt. And so Nick's Dedicated fleets, our Intermodal fleets have access to that freight as well. And so Nick and I have been on the road over the last year, spending time with our teams, which has some really great stories where you're seeing that connectivity between our segments and the sharing of assets and sharing of loads that are occurring through J.B. Hunt 360. So we do look at it holistically. We also believe it can help us facilitate and empower our mission statement.

Great. I want to touch on power only. One of the pushbacks that we've gotten is saying people are using those trailers as sort of in warehousing, right? Because warehousing was so tight, now that it's loosened up that power only sort of that demand goes away. Just any thoughts around that?

We saw that more during COVID I'd say, that we saw, I'd say, customer behavior around unloading was very difficult. We've seen it, at least in the Truckload space, it's improved quite a bit. Customers are destocking right now, whether that's out of our trailer or out of their warehouse, they're destocking. So I don't see it as being as significant right now. For us, I'm very excited about our power only, which what we do is this 360box business, which is inside JBT. If we go back to what we talked about with 360, we really unlocked that by building 360 and really connecting to the right truck. And so what we do inside Intermodal is we run a trailer network, and we power that with our trucks and with the railroads. And so what we've now done with 360box is we power that with our 360 platform. And what we really are going out to answer for our customers is if you think about what they need, effectively, there's about a $200 billion drop-trailer market. Today, a little less than 10% of that is answered by intermodal. The rest of that is done by truckloads. And that's what we're able to do as a power only through our 360box platform. What it also gives the opportunity for our customers to go into those shipments that have traditionally ran truckload that could run intermodal that Shelley mentioned earlier. And we're able to go provide them the truckload answer now and move them and then work with them to move that over to intermodal. And I'll tell you what we've had significant success in is being able to blend the two, to be able to go to a customer that has historically always ran a truckload and go in there now with our trailer and a power only answer and say, "we can do that 3 days a week for you on the trailer, and you can get benefits of intermodal on the other 2 days or the other 4 days." And that's been something that's been very successful with our customers that they've not done. So -- in the long run, it's going to allow us to continue to convert more of that business off the Highway into Intermodal.

I think it's important to note, too, that technology has changed the market for power only. I think if the -- if technology had not emerged, I don't know how much power only business there would be. But it is the first time so technology didn't even start emerging until 2017. We were one of the first ones to the market. And just like us, recognizing that as an opportunity is actually our customers that recognize that as an opportunity. We talked to them about J.B. Hunt 360 and the marketplace. And so we really like the concept. But would you do that with trailers. And it was like, "well, let us think through this." So we didn't even bring that to market until 2019. So if you think about a way now for Eric and the market to connect 1 million trucks, to the asset of a trailer with 360box, it changes the dynamics of how we could serve our customers over the long term. So I'm not sure how power only works with everyone else. But for us, those kind of operate together inside the platform, and we're able to blend the 2 networks, where previous to technology, you really had big asset providers handling drop-trailer business for about half the market. And then brokers handling the other, now you're seeing those 2 things really come together. So for us, it has changed for the long term.

Great. And you talked about managing costs, but J.B. Hunt has been also pretty vocal about we don't let people go, right? We're not doing these big head count reductions. So how do you manage the dynamics in this type of environment?

Well, I think one advantage about our team being together a really long time, that's not just the team you see here. Here, I should go down in the organization. You'll find a lot of years of service inside our company. [ In sense of ] Brad Delco, if he were here, he leads our Investor Relations. He says, we don't talk enough about our average tenure on our executive leadership team at J.B. Hunt is 25 years. That's not in the industry, that's J.B. Hunt, which happens to be in the industry. I think that's really important because we've lived through probably the toughest cycle, which is the economic recession of 2009. And that was something that we determined back in 2009 that we were going to make one major call on top of all the other strategic calls that we made for the business. The one that I think struck the most for us was taking care of our people. It doesn't mean that we'll be soft on performance. It doesn't mean that we won't expect excellence. But it does mean that we're going to think long term, we're going to think long term on behalf of our customers and shareholders. Ultimately, our people would benefit as a result. And so us being -- Nick and I actually were in the room when we made that decision in 2009. So it was pretty easy when COVID first started. We made that same decision. And I'm thankful that we did. We didn't let go any of our drivers. We didn't let go any of our warehouse teams, we didn't let go with any of our employees. And you know what happened? When we came out of COVID, wow, did we ramp up on behalf of our customers. It's one of the reasons that we grew so significantly from really midyear 2020 through 2022. And we think that same thing is going to occur. So for us, it really is that we view the freight recession as short term in nature and there are opportunities very long term. And I think it's important that our people feel very safe but yet we're managing costs. And so there's this balance that we're constantly working through. Allison, I do feel like if we weren't as bullish about our long-term opportunities, we probably have to make different decisions, and we'd have to talk to our people just that we didn't have the same view about the long term. But for us, it is about managing our business long term. We certainly are evaluating every possible decision that is short term, that doesn't impact our ability to create tremendous value for our customers and shareholders over the long term.

Yes. We're managing our costs. We're trying to drive efficiency. So we've got an elevation project. We call it to really drive efficiency through a lot of things. And so if people leave and we have some attrition, we're not replacing. So our head count is going down. If you had the ability to see that. So you'll see our headcounts going down. We're just not doing layoffs. We're not hiring but we've got other -- Dedicated is probably going to grow some from where they were in middle part of last year. And so you'll see some growth. And so we'll just take those opportunities and people will move around, but really driving efficiency and trying to make sure that we're taking care of everything. So we are cost-focused. We're just not having the layoffs, and we've seen that -- Shelley said this best, but we've seen that when this thing turns, we'll be ready and we'll be faster to the market to respond, to capture market share and pick up revenue on the opposite side.

And I certainly want to touch upon ROIC, right? You're guiding light. And how should we think through that medium term, near, medium term or like? And then to your point, gaining share, the ROIC longer term?

Yes. So first, I want to make sure that we talk through how we evaluate our business and how we think about it on behalf of our customers. So when we're talking to customers, we're really trying to think about for them what's the best way to solve the problem that they have. So how can we move goods the most efficient way possible. It just so happens that our businesses happen to generate very healthy return on invested capital, which is really good. But all 5 business units stand on their own from a margin target and also an ROIC target in total. And so we evaluate that based on our own experience and also our competitors that are in this space. So if we think about all of our businesses, you just heard Nick say, hey, we're going to grow inside Dedicated. It happens to be the most capital-intensive part of our business, but it's also the most resilient part of our business. So it's the business. It doesn't move a whole lot when it comes to returns in total, but it is going to generate a little less ROIC than, let's say, Intermodal, our largest part of our business. That business I've talked about, will be getting repriced on behalf of our customers, and that does have price pressure associated with that. So in the near term, it's important for us to continue to talk about growth and to grow with our customers because that business and the asset part of our business has the greatest return profile for us. And then certainly, on the non-asset part of the business, it has the greatest opportunity on ROIC, yet very low from an EBIT perspective in total, solves our customer's greatest challenges but less on EBIT. So I would say for us, ROIC is how we evaluate all of our businesses and how we actually model how we put together our budgets; how we think about our capital and our planning around capital. But I'll tell you all 5 of those segments have healthy margin targets in front of them, feel confident about what ROIC it will come down to, who's growing and at what pace it generates what the ROIC is for.

Great. I think we're actually running out of time. So any closing remarks you'd like to leave with everybody on J.B Hunt?

I would just say for us, we're very bullish about our long-term prospects. And our ability -- although we've grown significantly, we're a 61-year organization powered by our people, and we're going to continue to invest in our people, technology and capacity for the long term. We do believe that the market wants our services, and we want to be prepared and ready. And to steal Dan Field's quote, I think we'll start changing instead of saying, we're a cold spring for Intermodal. We're actually a cold spring as an organization. For us, we're going to continue to be focused on 3 key things for us. We're going to continue to invest in our people, technology and capacity. We're going to continue to drive value on behalf of our customers, and we're going to continue to give our shareholders long-term compounding annual returns in total. And so that's going to be our focus.

Great. Well, thank you very much.

Thank you, Allison.

Thank you.