Schneider National at Wells Fargo Conference: Strategic Insights for 2025

On Tuesday, 10 June 2025, Schneider National (NYSE:SNDR) presented its strategic outlook at the Wells Fargo Industrials & Materials Conference 2025. The company expressed cautious optimism about its performance, noting that earlier "worst-case scenarios" had not materialized. Schneider National highlighted both strengths and challenges, emphasizing its focus on organic growth, strategic acquisitions, and disciplined cost management.

Key Takeaways

• Schneider National remains optimistic, noting resilience in consumer demand and steady market conditions.
• The company focuses on organic growth, particularly in dedicated truckload, intermodal, and logistics.
• Strategic acquisitions, like Cowen, supplement organic growth and align with long-term objectives.
• Schneider National aims for $40 million in cost savings, leveraging acquisitions for synergistic opportunities.
• Pricing improvements are expected across truckload and intermodal segments, with a focus on contract renewals and productivity enhancements.

Financial Results

• Schneider National reported a steady performance in Q2, driven by resilient consumer demand and effective customer planning.
• The company remains on track to achieve its $40 million savings target, with variable costs staying within a tight range over the past four quarters.
• EPS guidance is set between $0.75 and $1.00, reflecting moderated negative forward sentiment.

Operational Updates

• Capacity management and driver recruitment are key focuses, with an uptick in driver availability suggesting tighter market conditions.
• Contract rates are improving, with Schneider National comfortable utilizing the spot market for short-term contractual gains.
• The intermodal segment shows strong growth potential, particularly in Mexico, supported by improved rail service and strategic partnerships like CPKC.

Future Outlook

• Schneider National anticipates continued pricing improvements in truckload, albeit at a moderated pace.
• The company is bullish on intermodal growth, focusing on margins and efficiency without adding trailing equipment.
• Regulatory challenges, such as the DOT’s English language provision and B-1 Mexican program enforcement, could impact capacity, especially near the border.

Q&A Highlights

• CEO Mark Rourke emphasized the company’s ability to adapt to market changes, focusing on controllable factors like freight allocation and cost containment.
• EVP and CFO Daryl Campbell highlighted Schneider National’s low leverage, allowing flexibility between organic and inorganic growth strategies.

In conclusion, Schneider National remains committed to strategic growth and cost management, aiming to navigate market challenges effectively. Readers can refer to the full transcript for more details.

Full transcript - Wells Fargo Industrials & Materials Conference 2025:

Unidentified speaker, Moderator: Okay, great. Going to go ahead and get started, sticking on the transport track again this morning. We’re very pleased to be joined by Schneider National. We have Mark Rourke, President and CEO to my left here and then Daryl Campbell, EVP President and CEO Daryl Campbell, EVP and CFO. Thank you so much for joining us.

Christine McGarvey, VP of Investor Relations that many of you know as well is in the audience. So thanks, gentlemen, for joining us. Really appreciate having you here.

Daryl Campbell, EVP and CFO, Schneider National: Thank you.

Unidentified speaker, Moderator: So maybe the best way to get started is kicking off with a couple of comments about sort of the current state of the market, what you guys are seeing. Got a lot of questions we can dig in. We do want it to be interactive. So folks in the audience, if you have questions, just raise your hand. We’ll get your questions asked to these gentlemen up here, and we can get started.

But I’ll hand it over to you.

Mark Rourke, President and CEO, Schneider National: Yes. Maybe just a little bit of contemporary

Daryl Campbell, EVP and CFO, Schneider National: Yes.

Mark Rourke, President and CEO, Schneider National: Just how

Unidentified speaker, Moderator: are things going here so far in 2Q? What are you seeing?

Mark Rourke, President and CEO, Schneider National: Yes. Think there certainly was a lot of uncertainty at the macro level and justifiably so. Folks are concerned about the overall demand levels, air pockets, all the things that Yeah. The the terms that that were being thrown about, Chris. And I I think as we sit here early June, it looks like, at least from our view, that the worst case scenarios that were being bandied about haven’t played out.

And and that very resilient consumer, that very resilient planning that our customers have gone through, I think, have kept demand fairly steady and, you know, seeing signs of seasonality and the things that you would normally expect to see. So I wouldn’t say it’s completely normal. That would probably be a little bit of an overstatement. But, those forward looking sentiments that were so negative, whether it was the consumer or how folks were talking about the recession and all the things that could or or should have played out with all the tariff discussions doesn’t seem to, at least at this point, not the reality of the condition on the ground.

Unidentified speaker, Moderator: So I guess we it’s a great way to start because I think there’s been a lot of discussion of having an initial lull after the tariffs were put in place in April. Then maybe once China came from $1.45 down to $30 there’d be potentially this surge of activity. Maybe it feels like the lull wasn’t as much of a lull as people were fearing. Maybe there’s the view that the surge may not be as much of a surge as people maybe thought it would be. I don’t know how you guys are thinking about what you’re hearing from shippers in terms of their behavior.

How much has been pulled forward and maybe or is it just going to be a little bit more steady Eddie as long as the consumer kind of continues to remain resilient?

Mark Rourke, President and CEO, Schneider National: Yes. If you look at, at least at our network, we can certainly see a downturn in the West Coast volumes that we normally see at this juncture. Obviously, coming through the ports, but there’s also a lot of bonded warehouse activity, I think, is still starting to come inland. And we’ve seen relative strength in other parts of the network in and out of Mexico, some Midwestern and South Southwestern locations has kind of taken up some of that slack that came through the West Coast. Chris, if you talk to our customers, you know, we have some that will describe what they expect use words like tsunami coming.

And then we have other customers that are saying it’s going to be pretty much steady. And some activity we’ve taken, but it’s not going to be a dramatic change than what you would typically typically expect in the third quarter. So it’s a little bit all over the place, but I think it’s probably less of the amplitudes, either low or high, that were bandied about earlier, and I think it’s going to be a bit more in the middle of the fairway. And when you think about

Unidentified speaker, Moderator: the various lines of business, I guess intermodal would be one where maybe coming off of the West Coast, we could have potentially seen a lull. But maybe if we can kind of run through and think about what you just said in the context of the different businesses. You have the network business, you get dedicated intermodal, maybe how those are reacting if they’re different.

Mark Rourke, President and CEO, Schneider National: Well, yes, of course, intermodal has a little more reliance on imports than our domestic business in the truckload segment. And so we have less impact there, and the domestic demand has been fairly steady, if I’m spectacular Yep. But but but steady. But we have lots of room for productivity enhancements. And as we’re getting through this allocation season of staying disciplined relative, making sure that we’re being as smart as we can on some rate recovery actions, you know, that means putting a little bit more in the spot market in the short term.

And the spot market’s responded quite favorably to things like the produce season. It’s responded quite favorably to things like road checks. So I think, Chris, that points to, while we’re not probably in perfect equilibrium yet on the truck side, we’re starting to get into those zones when you see the response to, you those little one off activities like seasonality of of produce and and things like road check.

Unidentified speaker, Moderator: And so that’s a great question. That was one of one of the things I wanted to kinda touch on, and maybe we can dig in a little bit deeper, which is sort of the supplydemand balance. I mean we’ve gone through a multiyear kind of downturn. We’ve seen capacity come out of the market. So I guess you said we’re getting closer to that equilibrium.

Do we still see capacity coming out of the market at this level? It’s been remarkable how resilient capacity, particularly in the specifically in the truckload space, has been. So is it are we finally getting to the point where there’s capitulation? We can there’s a lot of factors that go into that, but maybe that’s the broad question to start with.

Mark Rourke, President and CEO, Schneider National: Yes. I think we’re certainly on that path, and I probably stopped trying to predict. I think we all have, it doesn’t agree. Just because you it’s been difficult to do. But when you’re looking at the new truck orders as depressed as they are, when we have customers talking to us now about some scenario planning as they’re seeing more failures within their book, those are all good signs.

And more recently, as we’ve been talking internally, we’ve seen an uptick across our subsidiary companies and our flagship relative to driver recruiting and availability, which means, I think, that there’s less availability other across the network and or a flight to quality, which both play to our advantage. So when you look at, you know, some nontraditional signals, I think all of that points that we’re getting much closer to the equilibrium point. And the fact that we’re still without a great demand inflection, we’re still gaining modest price increases as we go through the allocation season, which we needed to start to see.

Unidentified speaker, Moderator: That’s a great point. Before I get to the pricing piece, I’m kind of curious about

Mark Rourke, President and CEO, Schneider National: I got you off balance or something here.

Unidentified speaker, Moderator: No. That’s well, you jumped ahead. So I do want to get to that. That pricing is extremely important. I do want to kind of round out some of the conversation around the capacity side because I think that’s also very interesting.

We’re starting to hear with used truck pricing kind of moving up that maybe there’s a little bit more activity. With banks getting a bit more strict in terms of what they want to do, I think there was a period of time where people didn’t want to get a return of used trucks even if the loan was in default. So I don’t know how you’re thinking about sort of the used truck market and how that kind of plays in.

Mark Rourke, President and CEO, Schneider National: Yes. The used truck market, particularly on sleepers, a little less so on the day cab configuration, but sleepers have been healthy for some time. And particularly as we came through COVID and the out of COVID, what some of the small carriers were paying for a truck, you know, at times, we were selling team trucks for almost what we paid for them after we’ve used them for a couple of years, right? So I I you just got to imagine the stress at those levels of what people are paying based upon how the rate structure has been. So I think certainly that’s led, I think, to some of the small carrier difficulties.

I think it’s led to some of the owner operator difficulties. And our channel checks would indicate that the defaults relative to those who specialize in the financing of trucks we see in our lease business for owner operators. Obviously, some of the bigger banks do a much larger scale. And I think those forbearance and some of those tactics have kinda hit the kind of the limits, and I think you’re starting to see, particularly the used truck pricing, I think you’ll see folks more interested in repo ing those versus, you know, looking for more creative ways to to help people stay.

Daryl Campbell, EVP and CFO, Schneider National: And there there’s also the used, you know, used truck dynamic in terms of pricing. You know, with the impact of tariffs on new trucks Mhmm. We expect that there’s some inflection in pricing for used trucks, which is actually a positive for us as it relates to gain on sale. So there are some offsets, you know, with the increased cost of new trucks as as it relates to gain on sale for us because the used used truck pricing should go up.

Unidentified speaker, Moderator: Yes. And when you think about where we are from a rate perspective for your average small carrier who maybe owns one to five trucks, are they essentially just using depreciation as a way to stay sort of in business? You guys don’t have that luxury. We look at you on an operating profit basis. Obviously, small carrier is operating for cash.

So even at these rates, is EBITDA positive for your average small carrier? Do you get a sense of are they still survivable in that scenario?

Mark Rourke, President and CEO, Schneider National: Well, it’s really hard to to put make the math work, particularly if they’re more reliant in the spot market, which they generally are, and we see that through our our brokerage business, obviously, our power only business, Chris. So the sustainability is a bit perplexing. And to your point earlier, it’s been much longer than I think any of us would have typically expected based upon prior cycles. But all all bad things have to come to an end at at at some point, and and I just don’t see it being sustainable where it is.

Unidentified speaker, Moderator: Okay. So now I’m ready to talk about pricing. So let’s talk about pricing. So, you noted that we’re getting kind of through the bid season. Doesn’t seem like rates are down.

So let’s talk about what you’re seeing in terms of contract rates in the bid season so far we’re getting towards the tail end.

Mark Rourke, President and CEO, Schneider National: Yes. Second quarter is a big quarter for getting to the allocation and June being the biggest net. So we’re not completely solidified there, but we’ve maintained our discipline relative to getting contractual improvement. If we don’t, then we’re more and more comfortable, particularly in certain network lanes, to put more of our business in the spot in the short term if necessary. Because then the other dynamic that’s also important to understand, Chris, is you have your initial allocation decisions.

But then you have how well does it stick and how well do carriers perform, how well do carriers accept, was there any paper savings versus real savings. And we want to make sure that as we get a chance to work through that secondary element, then we have a little bit more opportunity for our price points that we think are more competitive relative to what’s truly in the market. And so I always go, we have two selling opportunities, the one and the one. And particularly with big trailer pull shippers, we’re seeing more of that, which again gives us confidence that our strategy is the right and that we take this for the long haul and don’t sign up for things that we are not going to be happy with over the next twelve months.

Unidentified speaker, Moderator: So it’s really the opportunity is showing up the way that you had hoped it would? Correct. Okay. And then it’s interesting, as someone who’s observed this market for many years, the difference between the spot rates that we see quoted and the contract rates is still quite large. But then when we talk to brokers and carriers, we hear contract rates are flat to positive.

That’s not typical as we go back through history. So is it just that these spot quotes that we’re seeing just have no volume behind them? There’s just no depth in that market? It’s a little bit confusing to see such a widespread but still seeing a degree of rate increase at the contract level.

Mark Rourke, President and CEO, Schneider National: Yeah. And I think the contract level is, at least in our view, at least in our book, is much more of the trailer pull shipper versus the spot market gets, I think, compared on this live load, live unload, which is, in our view, just a different market. And can you play that around the fringes? Certainly, as a shipper. But to have the efficiency in what you need to do day to day to run your facility, your warehouse, your plant effectively, It doesn’t correlate completely when you have a trailer pool requirement and you have to have the efficiency of a trailer pool carrier to make that work.

So while we think it’s instructive, I think it does get overplayed a bit relative to at least the large carrier community as it relates to what’s the actual correlation to contract pricing. Okay.

Unidentified speaker, Moderator: So let’s talk about the segments to some degree. So maybe starting with Truckload and maybe how you guys are thinking about some of the cost side of the and productivity opportunities. So first quarter, I think, for the network business was challenging. We saw that kind of across the space. What have you been able to do so far here in 2Q to kind of help with either productivity or cost improvement, try to improve that profitability of the business as we move through the year.

Daryl Campbell, EVP and CFO, Schneider National: Yes. Yes. I mean, I guess the good news is we didn’t start in Q2, right? This has been an ongoing thing. As long as I’ve been around and even before, we’ve always been focused on cost.

From a network perspective, you could see that in the first quarter, we saw a year over year improvement in margin for the time in three years. That’s in a challenging market. Yeah. So some of it, obviously, is price, but we’ve taken many productivity measures, you know, as we’ve moderated capacity for for where the market is. There’s some significant input costs that are inflationary, but we’ve been doing what we can to kind of arrest those inflationary costs, whether it’s on, you know, equipment, whether it’s on, you know, driver compensation, insurance, and other safety items.

But if you also look at our last four quarters of activity, our variable costs have been within a very tight range. Right? And I think that’s a testament to all the efforts that we’ve been making, not just in q two, but for the past couple of years. Intermodal, same thing. We’ve we’ve been very focused on our ratio equipment ratios.

So we doubled our earnings in q one year over year Mhmm. Despite, you know, I would say, you’re not the greatest, you know, inter pricing improvement. So if you look at network, you look at dedicated, you look at intermodal, While we’ve got some price improvement, the margin is coming also from, you know, some of our cost measures.

Unidentified speaker, Moderator: Yeah. And can you build as you go through the year? It seems like you have some momentum there.

Daryl Campbell, EVP and CFO, Schneider National: Yeah. We think so. We have, you know, $40,000,000 that we, you know, publicly disclosed Yeah. As a target. We’re on track, you know, to meet that.

We also have, you know, synergistic opportunities with acquisitions that we’ve taken on board. So we’ve, you know, we’ve obviously did Cowen acquisition recently in December. We were very pointed in terms of some of the synergistic opportunities, a lot of which relate to cost. So we think there’s line of sight to 40,000,000, but every time we set a target, if we, you know, hit the target, which we usually do, we we re up.

Unidentified speaker, Moderator: Okay. So there’s more beyond 40,000,000

Mark Rourke, President and CEO, Schneider National: We think so. Okay.

Unidentified speaker, Moderator: I want to jump back to a point because I think this is sort of progression as we go through the second quarter, but really more of a thought in the back half of the year. And it’s the English language provision. There’s been a lot of conversation about that recently. So I’m kind of curious, what’s your take on this? So clearly, this has been a violation in the past but not out of service.

And there’s questions about enforcement. There’s question about geographic enforcement. What do you think it does to the market? What do you it means?

Mark Rourke, President and CEO, Schneider National: Chris, I think there’s that issue, then there’s an adjacent one that think is equally interesting to talk about. So the English language provision, which you said has always been a DOT requirement. I think they’ve given guidance to start enforcing on June 25. Yep. And they’ve given guidance to how to enforce.

So the the guidelines have come down. But you’re right. It is a matter of how consistent and broad based is the enforcement. I think it’s less of an issue for someone like us and perhaps other large carriers who go through that process in their screening

Daryl Campbell, EVP and CFO, Schneider National: Mhmm.

Mark Rourke, President and CEO, Schneider National: And hiring. And but I don’t think that’s necessarily representative of the industry. So it could be a bit more disruptive. Heard it’s been perhaps, in my view, a little bit dismissed too much, and particularly in certain geographies where that could have more concentration and more issue than others. So that’s one.

The one is the b one Mexican program Mhmm. Which was meant to allow Mexican nationals to run under US hours of service, come into The States, pick up a load, go back to Mexico. We we believe that there been a significant abuse of that. And just the mere threatening threatening of enforcement drives changes, and we’re seeing certainly that with some of our customers and the b one drivers. Just the fact that the border started to do some more questioning and more enforcement stopped the proliferation of carriers coming into The US, which then means little tightening of capacity, particularly around the border.

So just the the the Thrive enforcement can have some material impact, and then it then it comes down to degree how broad based is the actual enforcement once it’s in effect.

Unidentified speaker, Moderator: And so do we think that this is really more of a a a border states opportunity from both of these provisions, or do you think it has the potential to spread beyond that?

Mark Rourke, President and CEO, Schneider National: Well, it’s it’s being, prescribed to be across the board, right, not just in just in in certain geographies. And so, again, we’ll have to come down to see see how that’s done, but there are certain areas I think are more prone for that to happen in the South Southwest and the Southeast are certainly probably more opportunity.

Unidentified speaker, Moderator: So let’s talk a little bit about intermodal and dig in a little bit more deeply there. We had CPKC in the last session, so that’s obviously a provider for you. Maybe kind of we talked a little bit about this at the top, but how sort of the intermodal activity has been progressing here as we go through the second quarter, maybe a little less volatile, but that is somewhat tied to imports. So just maybe start with kind of the lay of the land in intermodal and dig a little bit deeper.

Mark Rourke, President and CEO, Schneider National: Yeah. We’re we’re very bullish on intermodal, and particularly in in the in and out of Mexico and the CPKC and the relationship we’ve developed there in the market over the last couple of years has really got a foothold. We’ve been through now our allocation season. We’ve got a proven track record. They have by far we have by far the best solution from transit time and execution, single rail line, the bridge, all the things that make just for a very truck like experience with intermodal, which that market has lacked forever forever in our view.

So feel very, very good how we’re positioned there. And the service across the board, obviously, there’s times where we could have a derailment or the implementation of the software that they were talking about earlier have some hiccups. But overall, the service performance across the board is very solid, and we don’t really have noise with the customer community concerned about converting over the road to to Intermodal because of concerns around service. And that’s always a great place to be in the sales process. So we were optimistic that our new business allocation wins, particularly coming out of the quarter, would allow us to mitigate whatever air pocket that could occur, and we still feel very, very solid about that.

We’re seeing that come through in the results. So we believe we’re going be growing faster than the market. And we’ve been more focused on discipline the last couple of years of making sure that we are margins and then let’s look at growth. I think we’re more balanced now based upon kinda where we are across the network. And we’ve done a really nice job through the allocation season of being more efficient in how we’re connecting.

And so that, again, allows us to drive more incremental margins on the business that we do have. And so I don’t wanna say we’re not gonna have an air pocket. Maybe something will come at us here with all the things going on in the world. But as we sit here, the half of the year, almost complete.

Daryl Campbell, EVP and CFO, Schneider National: I think one of the beauties of, you know, the the growth opportunity ahead of us is that we can grow without adding any trailing equipment. Right? So that’s from a capital investment standpoint, there’s definitely operating leverage upside there.

Unidentified speaker, Moderator: So we’re seeing domestic intermodal grow kind of across the board, not Schneider specific, but across the board in a market where you feel like the competitive truck offering maybe would hinder that potential market share. So is it rail service improvements that are a big driver of it? Is it consistency across the bottom of the cycle that’s gotten shippers to kind of embrace domestic intermodal a little bit more in a bigger way? How do you think how do you sort of explain the growth that we’re seeing on the domestic intermodal side kind of industry wide?

Mark Rourke, President and CEO, Schneider National: Yes. I think you hit two of the big contributors there. Certainly, conversion is the truck alternative is always how customers think about that from a price to transit and a service standpoint. And I think going into this year, expecting we’re a little bit long in the tooth in this recovery that most of our customers, particularly our big customers, had a more aggressive conversion plan to help mitigate against more balanced truck market. So going through the allocation season, I think we saw that.

And certainly, what we really try to lean into is where are our strengths? Our strengths aren’t everywhere across the intermodal landscape. But where our strengths are, we offer real value. And we’ve gotten more disciplined and more capable as a sales group of really pointing out those differentiators. And it certainly helps having the case CPKC different now with our UP relationship now going through our allocation season.

And so just feel that we’re all just connected and performing better in our ability to talk about our differentiators with their customer community. So but it helps having that be part of their growth plan coming into the year. Those are more receptive conversation. And so, you know, that gets the momentum ball rolling down the hill in the right direction.

Unidentified speaker, Moderator: And pricing within Intermodal relative to what you’re seeing through bid season on the truckload side? Load side?

Mark Rourke, President and CEO, Schneider National: Yes. Really not much change there. We’ve seen low- to mid single digit increases on the Truck side, and we’ve been relatively flat to slightly up in Intermodal. And that’s going to play out for the half of the year too, Chris, probably not a lot of change from what we talked about in the quarter.

Unidentified speaker, Moderator: Got it. Okay. I wanted to ask a little bit about how you’re thinking about capital allocation. So you did the Cowen deal. You got that done.

You’re working your way through. I guess, where does capital get called Are there other M and A opportunities? How do you think about that?

Daryl Campbell, EVP and CFO, Schneider National: Yes. I guess the beauty of where we are again is just given our leverage profile, we don’t have to choose between organic and inorganic growth. In terms of the hierarchy, clearly, organic growth is number one. Right? And organic growth in strategic years of opportunity.

So whether that’s dedicated in truckload, intermodal, logistics, those will always get dollars. And if you look at our capital plan, dedicated trucks, intermodal trucks is where most of our capital is allocated along with replacement, you know, to keep our Asia fleet Asia fleet tight. But at point seven times leverage, right, we don’t have to choose between organic growth and inorganic, which is why we can supplement that strategy with deals such as Cowen. So Cowen is the biggest acquisition we’ve done. Yep.

But it’s not the biggest that we could do. Right? So we’d we’d always see a path where for the right deal, we’d lever up, especially if it’s accretive. You know, there would be a line of sight to get leverage back in check. But, overall, we expect to be investment grade, right, regardless of our capital allocation.

But there’s a long way between point seven times and, you know, the the the top end of investment grade. So we’re always looking at the pipeline. Right? At any given point, there are at least a handful of potential targets that fit that profile, right, the profile that has worked with M and M, MLS, Cowen. You know?

But we we have the luxury of not having to choose between organic versus inorganic.

Unidentified speaker, Moderator: So maybe two questions that kinda come out of there. I I it it can you be a little bit more specific about what you think maybe the upper bounds of investment grade might look like from a leverage perspective? And then anything more in terms of what the opportunities could be from an M and A perspective? Does it need to be something asset based that has meaningful dedicated component to it? Does it ever make sense to roll up some of these sort of underperforming intermodal fleets?

I don’t know how do you think about this all of it.

Daryl Campbell, EVP and CFO, Schneider National: Yeah. So just answer your question say, times leverage, maybe up to two and a half times

Mark Rourke, President and CEO, Schneider National: Yep.

Daryl Campbell, EVP and CFO, Schneider National: Would would feel comfortable, especially, you know, we’re not for the right asset, we’re not we’re not generally, you know, acquiring fixer offers. Right? So if it’s accretive, you’d expect that even if you bump up to two and a half times within a few months or a year, you’d you’d get back below to something reasonable. So I guess that’s the leverage point. So we’re always aligned with our strategic years of growth.

So dedicated in truckload, you know, is where we’re allocating dollars today, which is why the last three acquisitions have followed that. But it’s not to say that we wouldn’t look at an intermodal carrier. The universe of potential targets in intermodal is is not very big. Right? There’s for obvious reasons, there’s concentration there.

But we would look at something if it became available. It’s just there’s not many things. Logistics, similar thing. There are a number of logistics carriers that are out there that, you know, we have taken a look at or could take a look at, but it it has to be compelling in terms of accretion, in terms of return, in terms of multiple. And we haven’t seen a whole lot of that in the current market either.

Unidentified speaker, Moderator: You guys you mentioned logistics. I think in the past, you’ve talked about what you’re seeing on the brokerage side in terms of capacity reductions. So we’ve heard various things in the market. Does it feel like brokerage is declining at a double digit pace on a year over year basis, meaning are we seeing brokers exit the market at that type of level?

Mark Rourke, President and CEO, Schneider National: Yes. Certainly, we’ve been on a multiyear trend now on kind of active quote unquote, brokerage license available that kinda peaked during COVID and has come down dramatically. And there’s also kind of another counterbalancing strategy. Customers are more asset based focused as well today and wanting to either rationalize the number of brokers they deal with or prefer assets, which as an asset based broker, that kind of can lead to some advantages, particularly with our ability to bring power only to play for for trailer pull shippers. So, yeah, it’s been a very particularly in the truckload space, maybe less so in LTL, less so in some of the other modes, Chris.

But the truckload space, that’s really a customer strategy more in my mind. And, you know, the fact that, really, the last two years now is less and less brokers into the bid process that we’re seeing from our customer base. So we’re trying to differentiate that we have an asset following that goes with that. And so, you know, look at us perhaps a little bit differently there. But it’s not not not as been as easy as it was a few years back for sure.

That’s for sure.

Unidentified speaker, Moderator: Certainly, I wanna get any questions from the audience if you do have one. Yeah. Fire away.

Mark Rourke, President and CEO, Schneider National: Yeah. It’s really hard to have perfect visibility to all of that. But certainly, I think there’s been a few large or leading retailers that that took advantage of the uncertainty of of tariffs and use of the bonded warehouse as an approach to at least get the product in here. And then the good news is, ultimately, that’s gotta be distributed to to the interior of the country. And so we think some of the mitigation to the air pocket is that is starting to move.

Whether it’s fully exhausted yet, I don’t think that’s a multi month backlog, but it’s probably a multi week that can benefit there. Again, that’s our best estimate. And then it’s mixed. We do think we’re going to see a surge in imports to beat the ninety day period. We have some customers, I mentioned earlier, couldn’t describe that in their world as a tsunami.

Others describe that more as a blip. But I think that will be good for intermodal, and I think that could potentially be a catalyst for some increased tailwind in the third quarter. We have to obviously see it all play out. But we think that it’s gonna be more good news than bad news.

Unidentified speaker, Moderator: So we have about five minutes left. I did wanna dig into the guidance a little bit. So I don’t wanna put words in your mouth, but you said that maybe the worst is sort of off the table. So I think EPS is 75 to a dollar. I don’t know if that means that $0.75 is maybe not as much in the crosshairs anymore, but maybe you could give a little bit of context of what you’re seeing and how you’re thinking about that.

And I think in the progression 2Q and beyond, you mentioned like a modest amount of seasonality, I think, when we we talked on the conference call, so maybe we could talk about that too.

Daryl Campbell, EVP and CFO, Schneider National: Yep. Yep. So I guess I’ll start, Mark. You can jump in. Sure.

So a lot of what Mark was talking about in terms of the backdrop is embedded within our guidance. So we have to look at a lot of scenarios. We look at a lot of scenarios every week. Alright? So from an economic standpoint, there’s the hard data, right, which we’ve seen, which has been resilient.

If you look at wage growth, you look at GDP growth, you look at inflation, definitely moderation there. But a lot of the uncertainty was forward looking and more sentiment based. So, you know, our guidance considers a range of outcomes which have a direct impact on on price and volume. There’s also the dynamic that Mark was talking about in terms of customer behavior. Alright?

It’s not universal even in the context of pull forward. You know, some customers would say, what pull forward? Right? Business as usual. Some would say they’re taking advantage of, you know, the tsunami and all that.

So, you know, our our guidance range, the white the width of the range would indicate that, you know, there there’s uncertainty. However, what we did say is that we’re not hiding behind uncertainty, and we’re focusing on what we can control. So whether that’s, you know, freight allocation and the contract renewals or cost containment or productivity, you know, those are staples within our guidance for, you know, for all of our our segments. So from a truckload standpoint, you know, network specifically, we expect to see year over year improvement in price. So there are three consecutive quarters where we saw improvement in price even in a tough market, even with uncertainty.

So we expect to see pricing improvement even though moderated versus what we thought, you know, maybe four or five months ago. From a dedicated standpoint, it’s continued to execute, you know, with our customers, you know, with with the contract allocation. And a lot of that is volume and productivity based. From an intermodal standpoint, Mark talked about the, you know, relationships with our rail providers, what we’ve seen for several quarters in terms of year over year volume volume improvement. We expect that to play out for the remainder of the year.

Pricing is flat. We still expect that to be flat.

Unidentified speaker, Moderator: Yep.

Daryl Campbell, EVP and CFO, Schneider National: And then logistics, you know, recently, we had revised our long term margin targets to three to 5%, but we continue to be profitable in in logistics. And I think a lot of that has to do with the technology that we have, our freight power technology, you know, matching capacity, you know, with demand, and a lot of what we’ve been doing on the productivity side to reduce the cost to serve. Right? So, you know, from a truckload standpoint, again, network, it’s really pricing continued pricing improvement, all all being moderated. You know, focusing on variable capacity to the owner operator model and supplementing that, obviously, with our with our company drivers.

And then, you know, intermodal dedicated logistics is continuing to do what we can do from an execution standpoint. But, you know, if you think about the three variables of price, volume, productivity, they’re all important, right, in each of our segments just to varying degrees. And our our guidance kinda considers that there are different proportions that are necessary, you know, to meet the objectives. Not sure if there’s anything you wanna add.

Mark Rourke, President and CEO, Schneider National: Yeah. So I guess I did open with we we didn’t get to the DEFCON four scenario. Yeah. But maybe maybe some other crazy thing will happen in the world that kinda gets us back in there. But so maybe feeling a bit more optimistic, Chris, than maybe we were even on the call.

So as we come through the third quarter, we might be in a position to narrow some guidance here, and and that was probably uncharacteristically large for us to to do that. Not a lot of people guide today.

Unidentified speaker, Moderator: To your credit, you did, so we appreciate that.

Mark Rourke, President and CEO, Schneider National: Thank you. I was I was baiting you for that comment. So overall, though, the what we were really talking about when we were last in public conversation was all this negative forward sentiment. It wasn’t really showing up in the numbers, but the sentiment was incredibly negative, and that seems to moderate too. Right?

So I think all of that puts us in a better position industry wise and certainly as a company, but still got to see it play out.

Unidentified speaker, Moderator: Sounds good. Well, I think that’s a great way to finish. So thanks very much for joining us. Really appreciate your time.

Mark Rourke, President and CEO, Schneider National: Appreciate it.

Unidentified speaker, Moderator: Thanks, everybody.

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