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

Good afternoon, and welcome to the J.B. Hunt Transport Second Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Andrew Hall, Senior Director of Finance. Please go ahead.

Good afternoon. Before I introduce the speakers, I would like to provide some disclosures regarding forward-looking statements. This call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as expects, anticipates, intends, estimates or similar expressions are used to identify these forward-looking statements. These statements are based on J.B. Hunt's current plans and expectations and involve risks and uncertainties that could cause future activities and results to be materially different from those set forth in the forward-looking statements. For more information regarding risk factors, please refer to J.B. Hunt's annual report on Form 10-K and other reports and filings with the Securities and Exchange Commission. Now I would like to introduce the speakers on today's call. This afternoon, I'm joined by our President and CEO, Shelley Simpson; our CFO, Brad Delco; Spencer Frazier, EVP of Sales and Marketing; our COO and President of Highway Services and Final Mile, Nick Hobbs; Brad Hicks, President of Dedicated Contract Services; and Darren Field, President of Intermodal. I'd now like to turn the call over to our CEO, Ms. Shelley Simpson, for some opening comments. Shelley?

Thank you, Andrew, and good afternoon. I want to start by thanking our employees across the organization for their hard work and relentless focus on serving our customers safely. We continue to operate in a dynamic environment that requires us to be nimble, make decisions quickly and adapt as conditions change. Time and again, our people have demonstrated their ability to do exactly that while remaining operationally excellent. As we move through the year, we remain focused on executing against the priorities we outlined at the beginning of 2026. First and foremost, that means driving disciplined growth through operational excellence. Customer conversations around pricing continue to evolve alongside a market that is changing rapidly. We are pushing where we can and where we need to. Second, we are leveraging the investments we have made in our people, technology and capacity to create sustainable competitive advantages. While the market environment has improved, our focus on cost control has not changed. We remain committed to removing structural costs from the business and improving the way we operate. That discipline is a critical component of our long-term strategy and positions us to perform well across market cycles. Third, we are focused on repairing margins and generating long-term shareholder returns. We have made meaningful progress repairing margins. And while further opportunity remains, we are encouraged by the trajectory of the business. We continue to have transparent conversations with customers about the investments required to maintain the service, capacity and innovation that supports their growth while producing appropriate returns for our shareholders. It is increasingly clear that the freight market has changed. Capacity has tightened across the industry as safety-focused enforcement and broader supply pressures continue to affect available truckload capacity. We saw that tightening build throughout the quarter, including a noticeable step change around the annual Roadcheck event in early May that has persisted. While demand is improving gradually, the current market tightness is being driven primarily by supply conditions. We didn't spend the last 4 years waiting for the cycle to turn. We spent the last 4 years preparing for it. In this environment, I am confident in our strategy that has enabled us to gain market share. The foundation we built over our history, our commitment to people, technology and capacity, being a leader in safety performance, consistent operational excellence and delivering value to our customers through our CVD process has positioned us to succeed today and to deliver even stronger results in the future. We have structurally lowered our cost to serve customers, creating additional growth opportunities while driving progress towards our margin goals, even without a material benefit from pricing. The financial leverage in our business model continues to improve through disciplined growth and the application of technology across the enterprise. All of this positions our company to compound growth through cycles. Looking ahead, I'm excited about the opportunities in front of us during the second half of the year. We expect demand for our services to remain strong and remain closely aligned with our customers on their capacity needs. We have proven that our model works and that our service delivers value. We remain focused on ensuring that we receive the appropriate return for the value we provide while continuing to create disciplined, sustainable growth and long-term value for our shareholders. With that, I'll turn the call over to Brad.

Thanks, Shelley, and good afternoon. I'll start with some quick comments about our financial performance in the quarter. As you've seen in our release, on a GAAP basis, total revenue increased 19%, operating income improved 32% and diluted earnings per share improved 45% compared to the prior-year period. These results reflect disciplined execution and continued momentum from the strategy we've been discussing for several quarters around operational excellence and lowering our cost to serve. While market conditions have improved, the biggest driver of our performance continues to be our people, executing at a high level on service, safety, productivity and cost discipline while leveraging our technology investments. As demonstrated this quarter, our cost discipline performance wasn't at the expense of supporting future growth as we achieved double-digit volume growth across JBI, ICS and JBT in the quarter. The investments we have made over the past several years in our people, technology and capacity are creating meaningful advantages for our business and allowing us to respond quickly to opportunities in the market. Let me turn to our efforts on lowering our cost to serve. While market fundamentals have shifted, this remains one of the most important operational initiatives underway across the company. Over the past year, we've removed over $135 million of structural costs from our company, and we continue to look for opportunities to simplify processes, improve productivity, increase asset utilization and leverage technology to automate work. Just as importantly, these efforts are improving the customer experience while creating operating leverage across the organization. Our objective remains the same as it has been since the beginning of this initiative, build a stronger, more efficient company that can generate higher returns across all market environments. We are encouraged by the progress we are making and believe there remains additional runway ahead as we continue to scale our technology investments and improve efficiencies across our scroll of services. Turning to capital allocation. Our approach remains consistent. We are a disciplined growth company, and we are equally disciplined in how we deploy capital. Our first priority continues to be investing in the business where we see opportunities to generate attractive long-term returns. We remain committed to maintaining a strong investment-grade balance sheet, supporting the growth of our dividend and being opportunistic with share repurchases when appropriate. We believe the investments we have made throughout this cycle have positioned the company exceptionally well for future growth. Importantly, much of our capacity has already been funded, providing us with significant flexibility as demand for our services improves. The combination of a strong balance sheet, healthy cash generation and disciplined capital deployment gives us confidence in our ability to continue creating long-term shareholder value. That concludes my comments. I'll now turn it over to Spencer.

Thank you, Brad, and thanks to everyone for joining the call. I'll start by saying how proud I am of our team's performance this quarter. In a rapidly changing environment, our people stayed focused on what we could control, serving customers, managing through volatility and helping them make the best decisions across their transportation networks. During the quarter, we saw an acceleration of the structural changes in the market that we discussed in April. Truckload capacity continued to tighten from ongoing regulatory enforcement, while at the same time, many carriers continue to face higher operating costs that are not fully supported by prevailing rates. As a result, several industry indicators, including higher tender rejections, higher spot pricing and lower driver employment moved towards levels not seen since 2021 and 2022. The pace of change has created real planning and execution challenges for our customers. Many shippers were not positioned for the speed and magnitude of these shifts, and they are now looking to the best providers who can help them build more durable and flexible plans around capacity, cost, service and mode. In the second quarter, overall freight demand improved modestly from the first quarter. Demand in many industrial markets is improving and U.S. consumer demand remains resilient. That said, demand for J.B. Hunt's suite of services continues to outpace the market, supported by record volumes in JBI and double-digit volume growth in both JBT and ICS. We gained market share across our services. Retention remains strong, and our pipelines in all business units continue to expand. As demand improved and capacity tightened, pricing and planning conversations with customers became more transparent, more frequent and more flexible. We saw customers initiate more out-of-cycle/mini bids as they work to keep pricing aligned with the rising cost of capacity. Customers are also becoming increasingly mindful of the carriers they rely on, consolidating more of their business with providers that can deliver capacity at scale. This is where our mode-neutral business model and our continued investments in people, technology and capacity create meaningful value. We are positioned to help customers optimize across orders, shipments and modes and to provide practical solutions as their networks adjust. During the quarter, the strongest areas of customer engagement centered on highway-to-intermodal conversion, dedicated fleets and access to safe, secure and reliable capacity. Looking ahead, we are actively helping customers prepare for fall peak, reset capacity assumptions and begin transportation planning for 2027. While many customers did not plan for this level of a change to occur this quickly, through external customer surveys and our ongoing customer conversations show a growing recognition that it is becoming more expensive to support the capacity, service and professional driving jobs that power our nation's supply chains. We believe that reality will shape future supply chain planning and budgeting discussions, and it reinforces the role J.B. Hunt will play in helping lead customers through a very dynamic operating environment. With that, I'll turn the call over to Nick.

Thanks, Spencer, and good afternoon. I'll share updates on our Final Mile and Highway businesses. But first, as we do at internal meetings, I'll start with an update on safety. Safety is core to our culture at J.B. Hunt, and we continue to challenge ourselves to improve on our record safety performance as measured by DOT preventable accidents per million mile. I'm proud that year-to-date through the second quarter, we are besting last year's results by 11%. To support our current and future growth, we will bring on drivers to maintain our high service levels to our customers. As the driver market has tightened, we have implemented various strategies to recruit and retain drivers to meet our growing need. We have implemented sign-on bonuses in several markets and targeted driver wage increases in select markets. While these are important early actions, we believe the industry will need to continue investing in professional drivers who operate safely and comply with regulations designed to protect both themselves and the motoring public. Moving to Final Mile. Demand remained stable across our core end markets of furniture, exercise equipment and appliances. Demand in our fulfillment business remains strong, driven by off-price retail channels. Our sales pipeline remains healthy, and we are adding new opportunities as we work to offset as much of our previously disclosed $90 million revenue headwind due to our focus on being disciplined. We remain committed to being safe and secure and providing customers with the high service levels that they have come to expect from J.B. Hunt. In JBT, our focus on operational excellence continues to drive growth and market share gains, highlighted by our fifth consecutive quarter of double-digit volume growth. As we discussed last quarter, the tight truckload market remains challenging for independent contractors, leading us to rely more heavily on third-party capacity at current market spot rates. During the quarter, our revenue increased 35% with load growth of 14%, but our gross profit dollars declined 12%, primarily due to higher purchase transportation rates. While we are seeing spot market opportunities in ICS to help offset some margin pressure, we don't have the same degree of opportunity within our trailer network business. Given the pace of market change, pricing implemented just a few months ago is no longer sufficient. Going forward, we remain disciplined in taking appropriate risk and are working with customers to better align rates with current market conditions and the value we provide. I'll close with ICS. The positive momentum we have felt in our business is beginning to translate to improved financial performance. We have been successful in bid season, winning more volume and are securing double-digit rate increases. While gross margin remains under pressure compared to last year, they improved sequentially from the first quarter, supported by increased spot and mini bid opportunities and contractual freight repriced closer to current market conditions. The market remains dynamic and going forward, our focus remains on leveraging our cost as volume scales through the platform and generating more gross profit dollars. While encouraged by the second quarter results, we remain focused on building sustained momentum. With that, I'd now like to turn the call over to Brad.

Thanks, Nick, and good afternoon, everybody. I'll provide an update on our Dedicated business. Starting with the quarter, our second quarter results once again highlight the strength of our Dedicated business. Despite a slow start due to weather, demand in the lawn and garden category improved and demand across our other end markets performed as expected. The second quarter also delivered another record safety performance for DCS as our team's commitment to safety and operational excellence continues to lower our cost to serve and deliver greater value for our customers. It's worth reminding everyone that while fuel is primarily a pass-through in our business, it is dilutive to operating income margin percentage. In the second quarter, we estimate that fuel was close to a 100 basis point headwind to operating margin percentage compared with the prior-year quarter. During the second quarter, we sold approximately 250 trucks and remain confident we will achieve our full year target for gross truck sales of 1,000 to 1,200 new trucks. Our sales pipeline remains robust and has strengthened over the past few months as the tightening truckload market has driven increased customer interest in a dedicated solution. In fact, our pipeline is currently at a record level in terms of number of trucks, which is a testament to the strength of our Dedicated business and the value we consistently deliver for our customers. Even with more opportunities in the pipeline, we have not altered our pricing or return discipline to chase growth. We have a proven track record of value creation through our Customer Value Delivery platform. And with our scale and density, we believe we can offer differentiated solutions to customers in the market. Last quarter, I outlined our expectation that we would return to fleet growth this year while achieving only modest operating income growth for 2026. On the fleet side, we need to see a wave of new truck growth for a few months before that growth translates into improved profitability given the expenses associated with starting up an account. I remain confident that this wave of growth is coming. However, we remain unwilling to sacrifice our discipline around margins and returns, particularly at this point in the cycle, simply to accelerate growth. Doing so would add risk and variability to our Dedicated business, which has proven resilient throughout cycles. In fact, our win rate on new deals remains consistent with historic levels. While Dedicated has historically been the last part of our business to see an inflection from a change in the freight cycle, and that will likely be true again in this cycle, I remain confident in our business and the growth opportunities ahead of us. We have a large untapped addressable market to grow into and a proven track record of disciplined financial and operational performance. I remain proud of our entire team's efforts, the great work of our professional drivers and the value we create for our customers. With that, I'll turn it over to Darren.

Thank you, Brad, and thank you, everyone, for joining us this afternoon. The consistent execution of our strategy over the past several years has positioned us well to capture market share gains in the current environment. Service levels remain strong, and we have available capacity to support customer growth at a time when Intermodal's value proposition is the strongest it has been in more than a decade. During the second quarter, demand for our intermodal service outperformed normal seasonality for the third consecutive quarter, and we also set a quarterly volume record with over 578,000 loads. For the quarter, volumes were up 10% year-over-year, the first double-digit volume growth quarter in over a decade. On a monthly basis, volumes were up 9% in April, up 9% in May and up 12% in June. Transcon volume grew 5%, while our Eastern volume increased 16%. Our Eastern growth comped against a plus-15% performance in the prior year or said differently, up 31% on a 2-year stacked basis. We continue to see significant road-to-rail conversion opportunities in the East, particularly as rising truckload rates, fuel prices and tightening truckload capacity make intermodal an increasingly attractive solution for shippers. While we have available container capacity to grow with our customers, we remain disciplined to ensure the growth is sustainable over the long term and at acceptable returns for the value we create. The rail network is experiencing quality growth, and we remain actively engaged with our rail providers on resource planning to support both current and future growth. While rail service has moderated slightly as volumes accelerated, conversion activity is at levels we have not seen in more than a decade. We remain confident in our rail providers' commitment to service and our collective ability to support higher volume levels while maintaining dependable and reliable performance. The same supply challenges affecting truckload capacity are impacting the drayage market, where driver availability remains tight, and we are working diligently to attract quality drivers to support our growth. In this environment, our in-sourced drayage strategy is a meaningful competitive advantage by owning our tractors, containers and chassis and utilizing primarily company drivers, we maintain greater control of the customer experience while reducing reliance on more costly and less reliable third-party drayage capacity. We previously outlined a path to the low end of our long-term margin range through contributions from cost, volume and price. We have done great work on lowering our cost to serve and believe we have achieved the point of margin from cost. On volume, the growth has materialized while remaining disciplined to attract the right freight that adds balance and connectivity across the network. So I would say we are pretty much there with the point from volume. The opportunity that is still in front of us is price. As you all know, our intermodal bid season begins each year in October and finalizes in Q3. So we're nearing completion of the 2026 bid season. In the first half of this year's bids, the operating environment at that time didn't present the same pricing opportunities that the current environment has. Historically, intermodal contract pricing has lagged truckload pricing, and we continue to believe that to be the case moving forward. However, given the pace of change in the truckload market, we are increasingly encouraged by the pricing opportunity heading into the 2027 bid season than we were even a couple of months ago. Encouragingly, our improved financial performance over the last several quarters is unrelated to any material contributions from price to cover inflation. While in prior cycles, we would typically see our financial performance lag other transportation modes, we feel like we've led the broader industry as this cycle ensues. With that, I'd like to turn it back over to the operator to open the call for questions.

[Operator Instructions] The first question will come from Bascome Majors with Stephens.

Darren, following up on sort of how you ended that on the pricing discussion and the optimism going forward. Can we talk through how prevalent the multiyear price agreements are with Intermodal customers today compared to prior cycles? And how much visibility did these commitments give you into the contract rate renewal plan into 2027 and even beyond? And just beyond the renewals, taking a step back beyond our past core pricing, what opportunities does Hunt have to increase Intermodal revenue per load over the next few quarters that might not show up in the renewal number, but could still meaningfully impact the business?

Sure. On the multiyear conversation, certainly, we have customers that we have engaged with multiyear programs. I don't know that we've ever talked about the percentage of our business that, that entails. And so I'm not ready to highlight that specifically, but we're aware of customers' value to our network and maybe areas that we can work with those customers specifically related to cost around serving their business. And so the behavior of our multiyear business is typically a little bit different than the constant change that we may face with customers that aren't engaged in multiyear agreements. Look, the environment we're in today does present new opportunities for us. I think that the number of mini bids or the number of times customers are reaching out to us looking for an answer, I don't remember it ever being any stronger than it is right now. We have tremendous numbers of opportunities to talk to our customers about new opportunities. Not every single one of those opportunities is going to drive Intermodal volume. It's coming in the door for J.B. Hunt's total book of solutions. And so we're constantly looking for that opportunity. I do think new business pricing has contributed to benefits in our network, and I fully expect that will continue through the remainder of this year and deep into next year's bid cycle. I know Spencer may also want to comment on this.

Yes. Bascome, thanks for the question. And Darren, I'll kind of start where you left off, really around mini bids. I think the frequency of bids has definitely increased. You said extraordinary, it was actually a record in the quarter, the number of opportunities. And that comes across bids, proposals as well as reviews. The main point on mini bids, I'd like to say is I'd almost like to get rid of the mini bid term. They are structurally larger bids as customers are competing for capacity to reset their networks. Our customers are still having significant challenges across their routing guides. And that gives, again, all of our services opportunities to step up and be the go-to for them and create opportunities again to hopefully get the right returns that we need on all of our businesses. So we look forward to continuing those conversations and working through and set our customers up with capacity plans that they can count on.

The next question will come from Chris Wetherbee with Wells Fargo.

I guess maybe just picking up on that point, Spencer, you're talking about mini bids. I guess we understand sort of how the bid cycle works and kind of what's locked in and maybe what needs to wait a bit. But I guess, how do you think about the back half from sort of a realized yield on the Intermodal side with the combination of mini bids and then maybe a little bit of an opportunity around peak season because we have seen some announcements from other folks about peak season surcharges. So maybe just sort of wrapping that all in and maybe how we could think about the second half, if there is going to be any change in what maybe we could see.

Yes. Chris, thanks for the question, too. I'll let Darren talk about yields and things like that. I think he's got a good answer for you there. But regarding peak season, I will talk about that. We do engage in peak season planning conversations at the end of the peak season of the prior year. So we've been in peak discussions since the end of '25. We do have peak agreements with our customers today that have proactively planned for the 2026 season. And then we're in discussions right now trying to get forecasts with our customers and setting up really our plan and sharing with them the cost to serve and execute peak. So as far as that goes, I would say that peak from my perspective, is going to be similar in timing and shape. The import peak that talks about coming in early, that can happen early, a little bit later. But really, the lag -- there's always a lag from the import peak to the execution of the domestic peak because that domestic peak is really matched to meet their consumer demand. And so that's why I say the timing and the shape we expect to be similar, and we continue to have ongoing discussions to make sure we're set up for success with our customers.

Yes. And Chris, let me just jump in. It's Darren again. I'll jump in on pricing change and magnitude. Look, we're not going to -- I don't have a forecast number for you or any kind of guidance. What I'll tell you is our Eastern network business behaves and trends -- tracks against highway competition, and we have massive opportunities coming in the door. Spencer just highlighted that we're setting records with the opportunities that we see. The gap between the highway rates and intermodal rates has grown in this cycle. And we have long time -- for a long time, we've said somewhere between 10% and 15% discount, fuel inclusive in the Eastern network is and has been sustainable for Intermodal. And we have a larger gap in the price today, largely because of rates that are now 6, 7, 8, 10 months old. So as we go through the rest of the year and bring on new business, we anticipate certainly closing that gap. I don't know what magnitude that presents in terms of the mix of the rate, how you model that, just know that certainly the opportunity to improve pricing. Now we're also faced with inflationary pressures. Driver wage cost is going to move up. The cost of labor is going to move up. Our rail providers are all going to be talking to us about cost challenges they're facing. And so we're looking for pricing to recover against inflation while also improving our margin a little bit. So certainly, as the rest of the year goes on and as we move into the next bid season, we will look for that gap from Intermodal to Truckload to close.

The next question will come from Jon Chappell with Evercore ISI.

Darren, on the volume side, the acceleration from April through June and then we look at the second half of '25 or even if you want to 2-year stack it, it feels like it's an easier comp. So when you take that June number of 12%, look at potentially easier comps, the backdrop that you just laid out as it related to capacity, rail service, the spread. Is that a number now for volume in the second half of the year that continues to build off of that 12%? And if not, what kind of derails that, no pun intended?

Chappell, is that a guidance question?

No, no, no. It's a cadence question.

Listen, I think the demand for our services is extraordinarily strong. What you heard in some of the prepared comments is a lot of focus on disciplined growth. There were opportunities in the second quarter for even more volume that wasn't going to be sticky or might have contributed to even worse cost challenges for us. So we're being careful in ensuring that intermodal is the correct long-term answer for volume to onboard and convert from the highway. And I would anticipate that opportunity will continue. We're also careful with our own capacity challenges. We need to hire more drivers. We need to onboard more drayage capacity today. So that can be a bit of a headwind for us, but we're -- but I'm confident in J.B. Hunt's ability to go out and attract and retain and bring on drivers for our needs. As the rest of the year goes on, I don't know how to give you a forecast of percentage change, but I know that demand is really strong for what we're doing.

The next question will come from Tom Wadewitz with UBS.

Congratulations on the strong growth and execution on the plan. I wanted to get a sense related to Intermodal margin of just where you're at on drayage productivity and also, I guess, just rising utilization of containers. It seems like you probably had a period where productivity was below normal, maybe against a weaker freight backdrop in, say, '23, '24. And then I think for -- I'm not sure how long maybe in the past year, you've had some nice improvement in that productivity, which I think has helped. Just where are you at on like loads per dray truck and container utilization? Is that -- can that go up further and help your margin in Intermodal? Or is that kind of peaked out and you can't squeeze out more there?

Sure. So on productivity around assets and our people, our driver productivity as well as our tractor productivity has been extremely strong. And clearly, we didn't prefund capacity on the tractor front or the driver front like we have containers. So we do have excess containers still, and there are thousands of loads for us to go grow into that capacity. So certainly, volume growth in Intermodal will continue to help spread fixed cost out over the system and continue to unlock margin improvement. I don't want to lean into driver productivity and tractor productivity on the dray front as being a major contributor to margin expansion. I think over the last 12 months, we really, really did a great job as an organization and the team was very successful in finding productivity benefits, and that is part of our cost-to-serve initiatives that we announced a year ago. And so we've been successful there, but I don't -- I will always put some pressure on that team for productivity improvement, but I'm not looking for that area to really unlock margin expansion. On the container front, certainly getting back to, call it, 2018-type container terms is certainly where we would anticipate to move. And over the last year or 2, seeing that improvement, while we stopped buying containers was one of the ways that has really helped that while we continue to grow into it.

The next question will come from Jason Seidl with TD Cowen.

Impressive quarter. I wanted to ask you, have you seen any impacts from -- at least early on from the Montgomery decision, both looking at ICS as well as the asset-based side? And then if you haven't seen it thus far, what are you expecting down the road from both a capacity as well as an insurance cost standpoint?

Yes. I would just say -- this is Nick. So I'll jump in on that. I would say that we've seen more carriers come to our platform and more carriers getting approved. So I think we have seen carriers migrating from small brokers is our speculation on that, trying to go to higher ground. Plus we have a lot of freight, as we've talked about, our volumes are way up. So I think we have a lot of opportunity. But from our standpoint, the Montgomery decision, it's just increased a lot of focus in the carrier selection and broker responsibility, but we already exceeded the federal minimums, and we have dynamic monitoring going on. So no risk exposure increase there for us because we think we've been doing a really, really good job for many years with our safety focus. So -- but we think we have seen more carriers migrate over to our platform because of that.

I might just add, too, this is Brad Hicks. From a Dedicated standpoint, in my prepared remarks, I talked about record pipeline. How much of that is directly related to the outcome of that ruling is hard to say. But I certainly think that, along with the other regulatory enforcement and the pressure on drivers, I do think there are examples where shippers want to ensure that they are partnered with the right reliable supply chain partner. And I do think that's a factor. It's really hard to pinpoint to what extent, but I do think that, that is showing up to some degree.

And Jason, this is Shelley. I would just add that in the driver market, there are specific markets that are as tight as we have ever seen. And so you're facing several markets where you're hearing customers come to us, but also really an advantage for us being on the asset side, thinking about how we attract, recruit and retain the best drivers. And so it is a challenge in the market, but I think it's a welcome challenge for us.

The next question will come from Brian Ossenbeck with JPMorgan.

Maybe just two follow-up questions on capacity. Shelley, you mentioned some of the markets are really tight in terms of the driver sizes ever seen. Darren, is that a cause for concern on the drayage side? I know you have a lot in-house, so everybody else probably feels it more than you would. But is that something where if you're already kind of at the top end of productivity, maybe that becomes a little bit more of a challenge. And then if you can just talk through a little bit more about the pulling back some of the containers off of the stacks because I know you're over about 90% right now for the first time in a while. So really the peak season discussions already underway. What are you thinking about managing that stack and maybe bringing some of that more to the market?