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

Good morning, everybody. Welcome again to our 32nd Annual Industrials, Transportation, Airlines Key Leaders Conference. I'm Ken Hoexter, BofA's Air Freight & Surface Transportation and Marine Shipping Analyst. Next up, we welcome J.B. Hunt. We welcome Spencer Frazier, EVP of Sales & Marketing; Stacey Griffin, SVP of Intermodal; and Brad Delco, SVP of Finance & IR from J.B. Hunt Transport Services. We welcome Spencer and Stacey each for their first time to our conference. Mr. Delco's fifth time, so you are halfway to the ten-timer award. I think you might get a nice jacket.

Rain jacket?

Definitely not unless you're hosting. And this is J.B. Hunt's 17th time attending our conference in the 24 years we've hosted. So glad to have you with us here and thank you for your continued support.

So Spencer or Stacy, I'll throw it open to the two of you. Let me open it up to you for your initial thoughts on the state of the market. I mean, so much has happened not just year-to-date, but in the last weekend, a couple of days, what three key things would you like us to take away from today?

Yes. Well, Ken, I'll start for having us here. I'm glad to be on stage with you and just also talk about what's going on. It has been a pretty exciting year so far, and definitely, things have played out, some of them, the way we thought they would and others not so much. But I'd say three things that would be important for this group to know and when I lead our commercial strategy and talk to our customers, they're looking right now in this period of change and kind of volatility is just to make sure that they're working with people that have agility to serve their needs as things continue to develop. And we do believe there are some things changing and we can get to that later based on the announcements from Sunday night. So that really kind of plays well into J.B. Hunt's business model and really across all of our services, how we can take care of them. The other thing, so number two is really around cost. Our industry continues to experience inflationary cost environment and has for 3 years, been in a deflationary rate environment, and that puts pressure on all of us. But specifically to J.B. Hunt, we're focused on lowering our cost to serve while improving our margins and that's something that we all have to do for the health of our company and the industry. And then third, stay on cost for a minute. Our customers also are looking for productivity. They're looking for ways to reduce their expenses. And that's where we have to come up with new ways to serve them and help them beat their budgets and make sure that our value proposition stands out to where we can do that and drive the margins that we need. So agility, cost of cost. Stacey, you got anything you want to add to that?

I think I'll add on to the cost of the cost because that is a prevailing problem for our industry, but for our customers, when they're looking for ways to control cost and to lower their transportation cost, a shift from highway to Intermodal is a shorter path to achieve some cost reductions in whatever market we're in. And so we are seeing our customers lean into that, trying to control where they're at today and get ahead of where they know the market is going from a highway side.

So Stacey, let's focus on load growth on the Intermodal, right? So it was -- you were kind of adamant or at least Brad was in telling us that the load growth in the quarter was not led by preshipping based on your customer conversations. Given that backdrop and the data we see, are we seeing -- given the air pocket that's hitting right now, do you still feel like that wasn't preshipping? Was it preshipping? Are we going to see a big catch-up phase now that we've got this settlement in a few weeks?

So I think this will be a two-parter. And I'll take the first part, and I'm going to let Spencer take the second part. When you look at our first quarter results and our double-digit growth in the East, that's not pull forward. The double-digit growth in the East is largely supported by the underlying service that both J.B. Hunt and with our rail providers that we're providing to our customers and that opportunity that shippers are embracing to convert from highway into Intermodal. And I think our growth in the East kind of contradicts of it the pull-forward concept. And -- but then what does that look like and the air pocket, I'll let Spencer speak to that.

Yes. And I'll also go back to -- every customer is unique. Every supply chain is unique and every customer in this period of the last 60 days has been managing their business and supply chain at a SKU level. Looking at should they pause, should they bring things forward, put it in a bonded warehouse, should they change country award sourcing? And they've been running plays like that over the last few weeks. And so when you think about is there going to be an air pocket, I also want to make sure and really disconnect the timing of the international supply chain and freight flows versus the domestic supply chain and timing that customers use to meet demand. And those 2 things are distinctly different. And a lot of business comes in at different times. It goes into storage. Sometimes it might cross dock in the day or transload in the day, but a lot of it goes into storage that gives them the agility to meet demand at different locations at different times. So is there an air pocket from an ocean freight perspective? Obviously, you can see the data and probably suggest that's going to happen. Will that take place today over the next 6 weeks? Likely. But are there going to be different waves of freight? There are a lot of customers that ran plays and put things into bonded warehouses. As of 12:01, tomorrow morning, that can change and that can start to move and create a wave of demand. How big that will be? I don't know. Is there business customers with some of their SKUs paused the button on production as well as shipping and inventory has stacked up in China? Yes. Is that moving today? Likely. When will that hit? 6 to 8 weeks later, maybe that's wave-2. And then really the third wave, I think, is the one that we're most normally associated with and consider associated with the fall peak retail season and I would anticipate that to happen too. So all of our customers are running different plays, have been doing that at the SKU level. The change Sunday night allowed them to think differently and I think could possibly see that pocket on the ocean front, but maybe close some of that gap in the next few weeks domestically.

Spencer, let's just kind of put that answer, right? So what are you hearing from customers now on their outlook, right? So when I look at our truck shipper survey right, it hit low levels into the 40s we hadn't seen for years, right, in terms of their confidence level, their outlooks, yet here where we are, things have changed, right, the world has changed. Have you had recent catch-up conversations in the last day or two and the last 20 minutes?

Yes, we are talking to them frequently. And I guess, one thing that was a little bit more of a concern for me above the tariff issue with some macro challenges to demand. But I'll say consistently, really, from March 1, that deadline to April 1 through today, our customers have talked about the health of the consumer and actually being engaged. And I think that's a function of employment and really maybe that psychological impact of the tariff and the headlines didn't trickle down into the consumer. So we would say that the customer is still engaged also across industries. So my macro concern has kind of drifted away. Now does that mean that there is a demand catalyst sternness in the face to drive incremental consumer demand, I'm not saying that. But I think things are at a steady state at the moment. And then how that kind of translates into domestic volumes from here, we'll have to see.

So just to clarify that, you're saying that the customer not because -- better than not fading it's showing some strength?

Yes, I think it's steady state. Yes.

Okay. All right. Stacey, Intermodal loads up 8% in the first quarter off of, I guess, easy flat comp. The Intermodal and Rail seem to be winning to share despite spot rates that are subcost for truckers. So you talked about the cost benefit, good service for the railroads winning, how do you win in that backdrop when trucking is like at these levels?

We win because we are going to the -- our customers from a position of strength with our operating excellence. We are -- we have a strong value proposition to our customers inside of Intermodal, but inside of all of J.B. Hunt in terms of being able to solve for them in a mode agnostic way. And that is helping them convert. We have a highway line and we're helping them convert freight from over-the-road to Intermodal where that best fits their -- what they're looking for from a balance of cost, transit capacity. And that's powerful for us to do that. The underlying rail service across all of our rail providers is better today than it has been in certainly like the COVID area where it was not good. It was not supportive of what our customers need. And we've got a long run of really good service, which is bringing confidence back to our customers. So that's powerful. And we talked about in the East where we grew closer to 13%, normally, growth in the East is fueled by high truck rates and high fuel. Those didn't exist in Q1, and we still have strong growth. Our customers are planning for a different day and a different cost structure and the service supports it.

So I want to dig into the share gains, right? Just because something throws me off. It used to be, I'd take Burlington's carload, Intermodal carloads and Norfolk, put them together, you'd add like a couple 500, 600 basis points, you'd get J.B. Hunt's growth levels, right? It was -- now I know they have a mix of international versus domestic and obviously being domestic moves. But if I just think about the math of what they're putting out, right? So Burlington's carloads were up 9% in the first quarter against a mid-teens growth a year ago. So tough comps. Norfolk was up a smaller 3.5%, yet your Eastern traffic was up 13%. So how do we -- and I mean, you are a major participant on their network. So what are you -- is it just share wins? Is it -- we're not seeing that the domestic international mix with the railroads, what is the difference particularly in the East?

One thing I want to point out across all, and it's actually more relevant to the BNSF is the railroads count the moves of empties, we don't count those. So when we talk about our growth, we're not counting our empty moves, the railroads do. And it's a mix of the air freight. The things outside of what we call, Intermodal. Here's the other key, inside of our network, we separate between Transcon and Easter Network, our Mexican business is in our Eastern network numbers, and we're growing out of Mexico. And so if we're going from Mexico City to Chicago, that's not touching the NS, and that's part of our Eastern network growth. Is that helpful?

Got it.

I'd also say, too, Ken. I mean, that relationship has probably broken down over time, too. I mean, definitely, Stacey did a good job of calling out -- Mexico is in our Eastern network. Movement of empties, railroads get paid to move empties. We don't get paid to move empties. It's a cost for us. They also have parcel. They also have LTL. They also have international and I think there's been some publicly known shifts of international freight moving between carriers and I think that throws some of those numbers off in terms of trying to -- it definitely has broken in terms of what it used to be. It used to be an easier look to see -- from weekly numbers to see how J.B. Hunt...

And I would also say, too, when you think about the diversification of our network. I mean, we use both railroads in the East, CSX, Norfolk Southern. We've been very complementary of the service we've had for quite some time, utilized BNSF from the West. We're using both Ferromex and CPKC in and out of Mexico. And we have had a long relationship with CN. So we have a breadth and depth in terms of the rail providers we're utilizing to provide service to customers, too, so.

So Stacey, Darren recently mentioned the old 1.8 to 2 turns per box per month might not be relevant going forward. Just want to understand why? Why can you not get back there? Is it just because you have so many boxes in stores that you can use? Or is there something about your network and utilization that changes that dynamic?

I would say, the key thing is PSR. So when the railroads implemented PSR a few years ago, it's slowed down the movement. And that basically took turns away from us.

Because they're running the trains on a schedule as opposed to just leaving when the yards are full, okay.

They're adding time -- transit time. They've added time to the schedules to produce a more consistent solution which is powerful. Speed is important, consistency is a lot more important for most of our customers because that allows better planning.

So better planning, better execution, better customer service, does that structurally fundamentally change the ROI on a per-box purchase for you?

I'm going to let Brad answer ROI questions.

Well, I would let Stacey answer that question and say, when we think about how we price to customers, we're thinking about we have an asset, we need that asset to generate a certain amount of revenue, to generate a certain amount of NOPAT to make sure we're getting the appropriate return. And so we would ultimately see that reflected in how we price and how the industry has to price Intermodal. So I don't know that our outlook on margins have changed. I don't think our outlook on what sort of returns we think are appropriate for us in the industry, given our scale and given some of the advantages we have. So I think all of that gets worked into how we price our network to make sure we're generating the right returns.

Okay. Just take one more on Stacey. The revenue per load was down sequentially in the first quarter. How do we decipher fuel surcharge versus mix impact of more East versus West? I guess, is there any way you can guide us thoughts on core pricing and if that mix impact of just continuing to grow in the East continues going forward?

Well, you used the word guide. That's a watchout for me, but...

I used the word guide?

You did. So close, right? So we shared in our earnings release that revenue is down 2%, but ex-fuel 1%, if I got that right. And so fuel is absolutely part of that impact. And with our growth inside of the Easter network, Eastern network loads are shorter length of haul, lower revenue per load, and that's going to have an impact. We have shared -- we're also -- we set out -- very transparently, we set out inside of this bid season, not -- really not unlike any other, but to focus on repairing our margin, easiest path to that is with price, right, to improve our network balance and so that's impacting. That shows up in mix as well and growth overall. We are having marginal success in our head hauls of improving price. We are having success in improving our network balance. And so if you think about it, revenue per load to go from Chicago to L.A. is very different from L.A. to Chicago and that shows up in that mix as well.

Yes, certainly. Darren mentioned margins needed repair, but only modest success in repaying rates while retaining business. So is that commentary indicating that it's hard to retain your own business? Is that why you highlighted lost existing business? Maybe thoughts -- maybe just a little clarification or understanding that?

I'll take that.

You're afraid of what I might say?

No. By the way, this is Stacey's first conference, and we're really glad she's here because she does price about 1/3 of all domestic Intermodal volumes and so I thought it was really important for her to share her perspective on the market and what we're seeing. We made that comment on our earnings call, hey, really to articulate the point that Stacey just made. This is our strategy. We want to get as much rate as we can. Number two, we really need to focus on getting better lane balance. That drives out a cost for us while providing us opportunities to generate revenue to reposition our box into a head haul lane to generate obviously a healthier rate in that head haul lane. And then three is to grow the business. And we wanted to make sure we articulated to our investors to say, hey, we're being very disciplined in that strategy in terms of trying to grow and to prove that we are being cost disciplined. The example that I've shared is Darren Field, you use different terminology than me, but Darren Field walks into Stacey's office and says, you have to prove to me that you're really testing the limits on where rates can and will go and what is acceptable in the market. We're in a competitive business. We have to price to the market and to our value proposition in the way that Stacey proves that, she says she lines up carcasses, which means you have to push rates hard enough until you lose some business. And I think we just wanted to articulate to the market. Stacey has been working very hard to push the market and she's proven that by losing some business. And that just, I think, hopefully should be a good indication to the audience and the investors that where we are really trying hard to push the market and make sure we're getting the right value for what services we're providing.

Yes. And Ken, I got to add something here. And I appreciate that perspective, but also you talk about retention. Stacey mentioned our focus and one of our #1 priorities for the organization is operational excellence. That creates a unique value proposition. We do have to make sure that we get the right price and return to deliver. But from a retention perspective, our retention and customer count in volume and revenue is the highest it's ever been across all of our business segments. That would not have taken place without that #1 priority and the focus on operational excellence. So that while we are going to continue to push our value proposition, that operational excellence really is what's going to drive that.

So Spencer, let's follow up on that because Darren noted success in early bid season. Are there any updates now that we're mostly done through the bid season in terms of change of rate levels through the process? I mean, can't imagine how you position that for when things can change so wildly like we saw over the weekend and yet you're thinking about the whole year ahead rather than each week to week. So do we -- did you see smaller bids, postponing of bids, normal course action?

Yes. So I'll say, from a customer perspective, in the bid season that really goes from Q3 through Q2, we've seen the normal course of action, as you mentioned, from a timing perspective, and then as things kind of progress that we anticipate there to be smaller mini bids, if there is some chaos or dislocation in the market. But I'd say, things have planned and executed on a normal cadence with our customers. And I don't know if you have any comments on that.

No, it's been fairly normal. And that's one of the -- I think frustrating for some people is that there's so -- it's been so much noise and so periodic these last few months, but that hasn't really entirely translated into how our customers are going about executing their businesses, particularly inside of their transportation planning.

So when you talk about the carcasses is walking away from some businesses, who has been -- is there anybody being aggressive in winning that? Is that going to truck? Is it other IMCs? Is it -- where is the business that we should look to?

It's -- I'd say it's less truck supported by the Intermodal service. So we're seeing less of the truck. It is other IMCs, it is other competitors. But it's no different this year than every year. I mean, we participate in a competitive bid season every single year. We're bringing our value proposition to our customers, as are our competitors. I do scratch my head sometimes because of where margins are for the industry that we're not seeing faster movement.

Faster movement of...

Of recovery. Margin repayer.

Okay. Because some are willing to run on thinner margins for longer than you would have thought or that they're staying in business?

I think it's a way of saying, when you look at our performance, we've had industry-leading volume growth at industry-leading margins. And it is surprising to see where some of the margins are in our industry, and they're not being more disciplined.

Yes. Okay. So let's talk about that, right? So I guess maybe a kilo question overall, but happy to hear your answer, which would be, you posted a 1% decline in revenues in the first quarter, but 8% decline in operating income. So would that -- is that a timing or weather issue or cost a lot more fixed than you would have thought? How would you kind of step back and think about that?

Well, I mean, I think you've heard Spencer talk about it, you've heard us talk about it. The industry has been in an environment where we've seen deflationary pressure on price and inflationary pressure on cost. Keep in mind that the down 1% revenue for our company included plus 8% volume growth in Intermodal. So we came off of an all-time record volume quarter in Q3, beating that in Q4. Obviously, first quarter seasonality, we're not going to beat the fourth quarter, but still the strongest first quarter Intermodal volumes. So we have done a good job of continuing to grow in a difficult environment to help us leverage some of our fixed cost. But you could look at the P&L. I think we've done a really good job of managing costs that are really within our control. One of the difficult and frustrating ones, and I don't love speaking to it, but is insurance and claims. If you go back 3, 4 years ago, it was 1.5% of our revenue in terms of a cost line item. And in the first quarter, it was 3.3%. So we lost 180 basis points on the insurance and claims line that's really made up of, call it, insurance premiums and our experience in how claims develop and settle. That's an industry problem. That's something that will need to be recovered through a rate cycle. And I think there's two ways companies can approach how to deal with that. They can double down or triple down and focus on safety. And you've heard us and Nick Hobbs talk about what we've done with our safety performance. 2023 was a record year for us in terms of DOT preventable accidents per million miles, we improved upon that in 2024, and then in our last earnings call, we said that our first quarter of '25 was better than '24. And the first quarter is always the most difficult year -- sorry, the most difficult quarter to execute on safety performance certainly compared to a full prior year. That, to me, is a very J.B. Hunt way of attacking a problem with long-term focus. The other way we could attack that is really just allow our shareholders or our owners to take on more of that risk by reducing the coverage, and we haven't taken that approach. So to your question about, yes, we still have inflationary cost pressures. We're addressing those. We're driving a lot of productivity and efficiency within our operations, but there's still some inflationary costs that we really do need a rate cycle to help us address.

Yes. And just quickly, I want to add. There's a couple of things we are focused on making sure that we price our business in a way it can get the return based on the value we create for customers. But also, we're not done on the cost front. We're never done. Safety is a great example, but we are extremely focused on lowering our cost to serve. And doing that, not just short term, but structurally over the long term and really looking at every aspect of our business, what's necessary to serve our customers at a high level and what's not and if it's not, then what can we do to get rid of that cost. So I want to make sure that's an area of focus for our executive team that we're working on every single day. That doesn't go away.

Yes. Yes. A question for either Stacey or Spencer, most assuredly not Brad. But historically, we've seen a flattish Intermodal operating ratio between the first quarter and second quarter and a 50 basis point improvement for the overall company. I know you don't forecast, but is there anything that stands out in terms of seasonality or expenses that we should recognize that could impact the relative performance?

Stacey just said no.

Yes, I'm not answering that question.

I mean, Ken, I think the biggest unknown is are we going to see mere profit or not? And I think that I'm glad Stacey said it, but just to reiterate it, there's been a lot of volatility on the news, a lot of different headlines and if you didn't look at a TV or if you didn't look at tickers going across and just looked at what was happening in transportation, I think you would see it's been a little bit more business as usual relative to the volatility on the screens.

And then I'll just say again, on our earnings call, I talked about our customers at that moment in time were waiting for the dust to settle. And it was almost like the next day, they started pushing buttons, pausing the talk about the bonded warehousing, also looking at different sourcing options. Well, they're also doing that today at a SKU level. So they're really looking at what can I do, and we're trying to connect with them on their forecast over the next week -- the next 6 weeks and obviously the rest of the quarter. So forecasting that demand from a domestic perspective is what we're really having conversations on right now.

Is there -- I know you guys tried to quantify the international exposure, it was more specific to China. Is there an overall what is coming in from international and so thinking about flow-through of the air pocket because it sounds like given you're more domestic or transloading, it doesn't impact it, but there still is that, as you mentioned, the potential for the air pocket and your customers. So what's the exposure?

Yes. I think Darren kind of mentioned the numbers around 30% or so of our business originates off the West Coast. And then you can say 30% or so of that comes from China, so you could extrapolate that out to does -- our business impacted 9-ish percent or something. That's to be determined, but that's also to be determined based on the timing of the international versus domestic. So we'll have to see. I do think that some of our customers have taken a little bit more of an aggressive stance and kept a constant flow. Others still played in that wait-and-see mode, and that's what gives us a little more variability than that number if you just put the two together.

So that was a, no, we're not commenting on seasonality or no, there's no seasonality difference. All right. So switching over to the digital marketplace...

Good idea of the transition.

I would say too, I mean, Ken, you know that sometimes I like expressing the passionate -- passion for the responses that I give to you sometimes. But we've talked about this pull forward and I think we're trying to be logical to say that, hey, there are some customers that may have done some of that. And if they have, that means that there should be warehouses stuffed with inventory on the West Coast that we'll still need to advance and move. And so I think to your question, maybe it's 1 week or 2 or 3 weeks from now or 4 weeks from now, we have better insight to say, hey, we're not seeing the air pocket because our customers have brought in inventory, and we're going to be still moving that inventory, that will be enough to bridge. And we could see that. And then by that point, we've seen additional cargoes land on the West Coast and to start wanting to move additional freight. So I mean it's still a lot of uncertainty, but I like and I've shared that before, the volatility we've seen in imports and comparing that to the rail volumes you referenced earlier, those are pretty nicely correlated. But if you look at Hunt's volumes over that period of time, it's a lot smoother. And I think that's something to be mindful of when you think about, hey, we know there's a relationship between international Intermodal and imports, it's more directly and probably more timely correlation. But when you look at J.B. Hunt's monthly volumes that we've given you, you've seen it's a lot smoother than the volatility that you may see and the weekly reports or whatever everyone's tracking.

So Spencer, maybe just a little bit on the digital marketplace, ICS JB 360 for a quick second here. ICS continues to improve its losses, it greatly shrunk its employee base. Is this a move -- you're moving back to profitability quicker. And then just a side note, the 360 marketplace was down to 34% of the brokerage, whereas 2 years ago, it was 65% of the brokerage, I would have imagined digitization would have gotten larger, not smaller?

Yes, yes. And I appreciate that question. As far as the momentum inside ICS, we still have that today. Regarding the marketplace and automation. When you think about what we did specifically coming into the first part of 2024 and throughout the first half, really focusing on keeping our customers freight safe and secure. We did reduce the level of automation to protect our customers' freight from cargo theft and added more manual intervention. Today, I would shift the automation story to really doing what we can to automate and validate carrier credentials that a carrier is who they say they are, eliminate fraud and empower our people to know that in a way that then still allows them to execute the business. So I think you've probably seen a trough from an automation perspective and then the advancements in leverage in AI to do that fraud detection is where we really spend a lot of our money over the last several quarters inside ICS to really put us in a spot to go forward.

It's helpful. I'm just going to go over to different parts of the company, right? So a dedicated fleet you targeted adding 800 to 1,000 trucks in capacity sales offset by fleet losses through the second quarter. Any way you want to quantify what's going on in terms of growth versus the fleet losses and how that was a big discussion for the quarter?

Yes. I'll just say really quickly, I think Brad mentioned the kind of losses ending really through June and July, that's still on track. And then also when we think about our pipeline, our pipeline is as strong as it's ever been. And we're looking to make sure that we can convert those and have our goals achieved from a growth side. Anything else you'd add there, Brad?

Yes. I mean, the only real change in tone there. We still talked about seeing net fleet growth this year. So 800 to 1,000 trucks, it's an annual target. That is on a net basis. We used to talk about 1,000 to 1,200 on a gross basis. I just think it was cleaner for us to talk about it in that perspective. We still are targeting to see net fleet growth this year. The one thing that we did soften our tone on is growth in revenue and operating income in DCS for this year. And reason being it's just the timing of when these deals close with all the uncertainty we've had in the market signing up on these 5-year contracts, maybe that has been pushed or delayed in a month or 2. And given that each of our dedicated deals has about a 6-month startup window, if we're not at a point where we're seeing contribution -- positive contribution dollars yet, some of that benefit may flow more into '26 versus '25. And so -- but overall, I would say I think the performance of our dedicated portfolio and business has continued to shine very brightly relative to our industry, and I think we'll get back on a pretty good growth track once we get past these known losses that we've been speaking to for quite some time at this point.

And certainly, some of your dedicated peers talk about the increased competitiveness in the market and what that's doing in pricing. Stacey, let me come back on Intermodal, just to understand. So you've got 30% of the capacity stacked. I asked the question, I think, on the call about why not unload more assets, get rid of some of it so you can -- does that make the bounce back quicker? Maybe just to like throw out thoughts of wouldn't it -- if there were less assets standing on the sideline, couldn't that enhance. But of course, you've already paid for it. And so you've got the argument of why would I get rid of it if it's already paid for it and depreciated. So I think about the market as it prepares for an upturn. Is it more hampered than normal or not necessarily?

I'd say, when it comes to our fleet, and yes, we have a lot of container stack and that's our investment in our future growth and supporting our customers because there was a time coming out of COVID where our customers wanted more from J.B. Hunt in terms of capacity than what we could provide. And so we have a commitment, and that's a mutual commitment with the BNSF to have a fleet that is supportive of whatever -- really whatever the market throws at us. And that stack of equipment has 0 bearing on how we price inside of our bid. That's not -- it doesn't drive what we do. We can leave those in the stack until we can make an appropriate long-term economic return or unstacking that.

Yes. What's the spread between Truck and Intermodal right now. So how do you -- I know you talked about winning on service and different things, but how do you think about that spread?

So we've always said, as long as I can remember, that the spread that really drives conversion is healthy. In the East, is 10% to 15% and in the West, it's more like 20% to 30%, and we're in those zones today. We're moving in those zones today.

All right. Wonderful. That's a great wrap-up. I mean, I appreciate we hit on a lot of different subjects real quickly. But thinking about kind of the growth with the rail service, I like the -- you'll find carcasses as you push rates, the spread between the rates, the ability to, I think, again, focus on the margin, you're focused on the margin, but so much unknown right now given what's going on with the customers. But thank you very much for your insights and thoughts and I appreciate your time. Thanks again.

Thanks again.

Thanks.