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Speaker 1: Hi everyone, and welcome to Bloomberg Intelligence Talking Transports Podcast.

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Speaker 1: I'm your host, Lee Klaskows, senior freight, transportation and logistics

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Speaker 1: analysts at Bloomberg Intelligence, Bloomberg's in house research arm of

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Speaker 1: almost five hundred analysts and strategists. Before diving in a

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Speaker 1: little public service announcement, your support is instrumental to keep

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Speaker 1: bringing great guests onto the podcast like the one we

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Speaker 1: have today. If you haven't already, please do take a

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Speaker 1: moment to follow, rate and share the Talking Transports podcast.

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Speaker 1: We really appreciate your support, and also if you have

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Speaker 1: any ideas for future episodes or just want to talk transports,

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Speaker 1: please hit me up on the Bloomberg terminal, on LinkedIn

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Speaker 1: or on Twitter at logistics Lee. Today, we're delighted to

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Speaker 1: have Chris Weatherby with us today. Chris is a managing

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Speaker 1: director and head of Transportation Shipping Research at Wells Fargo,

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Speaker 1: where he just launched coverage earlier this year. Prior to Wells,

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Speaker 1: Chris held similar roles at City Recent Church for fourteen

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Speaker 1: years and it's been covering transportation and shipping stock since

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Speaker 1: twenty two thousand and five. Chris also has the distinction

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Speaker 1: of being an Institutional Investor ranked analyst. Over the years,

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Speaker 1: Chris received his BA degree from the University of Maryland

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Speaker 1: completed his dual focus NBA degree in Finance and Accounting

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Speaker 1: with honors at Fordham University Graduate School of Business so

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Speaker 1: go rams. Also, more importantly, Chris has the distinction of

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Speaker 1: being the only repeat guest on the podcast. This is

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Speaker 1: his third appearance, and since Bloomberg Intelligence does not provide

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Speaker 1: an investment advice, I love talking to seuthside analysts like

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Speaker 1: Chris to hear how folks should be positioning themselves ahead

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Speaker 1: of earning season, which kicks off on October fifteenth with JB. Hunt.

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Speaker 1: Thanks for joining us today, Chris.

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Speaker 2: Thanks Lee. Great to be here and appreciate being a

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Speaker 2: repeat guest. I love joining you.

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Speaker 1: Yeah, no, it's fantastic. Always love speaking to you. And

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Speaker 1: so I know you're out with your earnings previews, So

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Speaker 1: you know, what should we be expecting going into earnings?

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Speaker 2: Yeah, I mean, I think the thing that we're telling

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Speaker 2: investors this morning as we have our notes out getting

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Speaker 2: us ready for third quarter earning season, is that the

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Speaker 2: freight market remains quite uncertain. And this has been something

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Speaker 2: we've been talking about for really since we launched here

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Speaker 2: at Wells back in June, felt like we had been

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Speaker 2: bottoming and there was some optimism as we ended the

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Speaker 2: second quarter, but the third quarter was kind of a

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Speaker 2: little bit lackluster, to be quite honest, from our perspective,

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Speaker 2: and that's really a focused comment on the truckload market,

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Speaker 2: where we didn't see September turn out to be quite

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Speaker 2: as strong as June had been to end the second quarter,

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Speaker 2: and so in that context, we really think that it

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Speaker 2: still makes sense to focus in on the rail space,

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Speaker 2: which in our opinion tends to be a little less

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Speaker 2: volatile than what we see across other parts of the

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Speaker 2: transportation market. So in that context, we still like the

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Speaker 2: rail group. We think they're relatively attractive numbers for the

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Speaker 2: third quurt generally speaking, or coming in line in some

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Speaker 2: cases maybe a little bit above what expectations are, and

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Speaker 2: we still believe that the group can show accelerating earnings

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Speaker 2: power as we move into twenty twenty five. So broadly speaking,

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Speaker 2: in that context, we like the rail space. We actually

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Speaker 2: upgraded Canadian National to overweight from equal rate. Happy to

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Speaker 2: talk about that as well, but that sort of really

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Speaker 2: expresses what we're seeing in the space. Which is kind

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Speaker 2: of our favorite subsector right now.

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Speaker 1: Yeah, so what's the catalyst for the Canadian national upgrade?

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Speaker 2: Yeah? So I think CN is pretty interesting in a

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Speaker 2: couple of respects. So this year hasn't been the best

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Speaker 2: year for them, there's no doubt about that. So the

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Speaker 2: second quarter, they had some operational challenges that hurt them

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Speaker 2: in an environment where they're actually showing quite good volume growth.

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Speaker 2: So that was disappointing, I think to investors. And we

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Speaker 2: flash forward to the third quarter, and the combination of

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Speaker 2: some wildfires that happened earlier in the quarter and a

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Speaker 2: strike which happened later in the quarter really did take

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Speaker 2: a decent chunk out of the earnings power. We think

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Speaker 2: about twenty five cents for the third quarter. Specifically. As

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Speaker 2: a result of that, the company did have to cut

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Speaker 2: its guidance for the full year when they were at

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Speaker 2: a competitor conference in earlier September. What I like though,

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Speaker 2: when they did lower the expectations for this year to

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Speaker 2: low single digit earnings growth, was that they also lowered

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Speaker 2: their longer term EPs growth algorithm from ten to fifteen

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Speaker 2: percent down to high single digit growth. We think that's

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Speaker 2: a much more realistic expectation over the course of the

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Speaker 2: next couple of years. So in terms of catalysts, that's

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Speaker 2: sort of the bad news. The good news is really

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Speaker 2: where we're moving from here. Number One, expectations are lower

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Speaker 2: based on what we've seen so far and what I

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Speaker 2: just highlighted. But secondarily, we think there's a couple of

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Speaker 2: those items that we called out from the second quarter

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Speaker 2: in the third quarter that collectively is about forty cents

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Speaker 2: of earnings from a full year basis. We don't expect

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Speaker 2: those to recur in twenty twenty five, and if I

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Speaker 2: think about what that means to earning its growth next year,

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Speaker 2: that's about five hundred bases points of growth, so it

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Speaker 2: gets about halfway up towards a double digit number, which,

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Speaker 2: like I said, compares to the high single digit target

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Speaker 2: they game. So we think they have a relatively low

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Speaker 2: bar and a nice catalyst to be able to get

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Speaker 2: there on the back of some of these easier comps.

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Speaker 2: And in the near term, I think the grain harvest

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Speaker 2: in Canada looks good relative to last year, and farmers

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Speaker 2: last year held back some of their crop in November

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Speaker 2: and December, so we should see some of those easy

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Speaker 2: comps show nice volume growth as we move through the

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Speaker 2: fourth quarter, so as we look out, you know, broadly speaking,

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Speaker 2: we see earnings growth accelerateed and it comes on the

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Speaker 2: back of what are very very, you know, very very

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Speaker 2: attractive valuation relative to the rest of the group. This

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Speaker 2: is a name that used to trade at a one

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Speaker 2: turn premium to the average rail pe multiple. It now

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Speaker 2: trades at a one turn discount, and we think that's

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Speaker 2: an opportunity.

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Speaker 1: All right, great, and so in addition to CIAN, I

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Speaker 1: think some of your favorite names are are CP and

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Speaker 1: Union Pacific within within the rail space.

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Speaker 2: Yeah, we like CP, Norfolk Southern as well and Union Pacific.

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Speaker 2: CSX is our equal rated name.

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Speaker 1: Okay, what's going to take for CSX to get out

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Speaker 1: of there and get to so you know where the

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Speaker 1: other rails are. You guys do overrate, right, overweight, You

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Speaker 1: don't do a buy sell. It's overweight and underweight.

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Speaker 2: Correct, that's right? And equal weight is where CSX stands today.

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Speaker 2: You know, I think from csx's perspective, they're a little

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Speaker 2: bit of a victim of their own success. They're executing

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Speaker 2: relatively well, and so from operating ratio perspective, if I

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Speaker 2: strip out the quality carriers trucking business which is embedded

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Speaker 2: in their or they're actually running basically at the top

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Speaker 2: of the stack in terms of the rails from a

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Speaker 2: margin standpoint or an operating ratio standpoint. So they're amongst

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Speaker 2: the best, if not the best, And as I look out,

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Speaker 2: their volume growth is going to be fine relative to

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Speaker 2: the group. We just don't think there's that much opportunity

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Speaker 2: to improve the margins materially from where we are right

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Speaker 2: now since they're running so well. As a result of that,

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Speaker 2: I think their earnings growth is going to be towards

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Speaker 2: the bottom, if not at the bottom of the industry

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Speaker 2: as we look out to twenty twenty five. So names

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Speaker 2: like Norfolk Southern where they're playing some catch up following

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Speaker 2: some challenges over the last couple of years, or See

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Speaker 2: where there's a really interesting longer term growth story around

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Speaker 2: the combination of their three country network. Those really stand

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Speaker 2: out in addition to CN to us.

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Speaker 1: Right and so like going into earnings, Are there any

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Speaker 1: of the railroads that you know they're at risk relative

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Speaker 1: to consensus not necessarily your numbers, or do you think

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Speaker 1: consensus is not kind of taking things into consideration.

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Speaker 2: You know, for the most part, we're looking for a

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Speaker 2: little bit of upside at Norfolk Southern, a little bit

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Speaker 2: of downside at Canadian National. For the points that we mentioned,

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Speaker 2: really more strike you know, related type of stuff, So

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Speaker 2: not necessarily something we're super concerned about. I think that

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Speaker 2: expectations maybe are little on the higher side for Union

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Speaker 2: Pacific going into their earnings print and so an inline number,

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Speaker 2: you know, may be just okay. But for the most part,

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Speaker 2: the Rails, and this kind of goes back to what

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Speaker 2: I mentioned before. One of the reasons why we like

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Speaker 2: the Rails and the context of this uncertain fright environment

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Speaker 2: is that their earnings tend to be a bit more predictable.

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Speaker 2: They obviously give us volume on a weekly basis, so

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Speaker 2: we at least get half of their revenue picture before

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Speaker 2: they ultimately report, but their numbers tend to be a

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Speaker 2: little less volatile, so we feel a little bit more comfortable,

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Speaker 2: particularly in these periods of time where you know there

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Speaker 2: could be a little bit more variation at other names.

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Speaker 1: Right, that's great, So let's switch s geers to the

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Speaker 1: truckload space. I mean, that's been extremely volatile space. I

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Speaker 1: know you've been watching the spot market for a turn

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Speaker 1: as egoly As I have. What are your thoughts on

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Speaker 1: the companies that you cover heading into earnings for the

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Speaker 1: truckload space.

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Speaker 2: Yeah, so, you know, generally speaking, we are pretty much

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Speaker 2: in line for the third quarter. We think that the

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Speaker 2: quarter ended relatively in line with low expectations for the

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Speaker 2: progression from two Q to three Q. So I think

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Speaker 2: the numbers for the third quarter are basically in line.

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Speaker 2: It's really the fourth quarter where we have some degree

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Speaker 2: of concern and we are below and we cut numbers

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Speaker 2: a little bit for the fourth quarter and really the

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Speaker 2: beginning of twenty twenty five. I think the story there

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Speaker 2: is that I think there's a hope that seasonality could

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Speaker 2: begin to improve in September to the point that we

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Speaker 2: could see a little bit more clarity around project or

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Speaker 2: spot business during the peak season. I'm not sure that

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Speaker 2: really showed up as much as we thought it might

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Speaker 2: in the checks that we were doing at the end

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Speaker 2: of the quarter, and as a result of that, we're

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Speaker 2: a little bit more cautious about it. It has the

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Speaker 2: potential to you know, mute to some degree. The ability

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Speaker 2: of the truckload carriers to get better rate increases as

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Speaker 2: we begin the bid season. In the beginning of twenty

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Speaker 2: twenty five. So that's kind of the general cautious tone

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Speaker 2: that we're sounding here is that you do have a

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Speaker 2: little bit of a build happening, but it's not maybe

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Speaker 2: to the same degree that we had expected. So numbers

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Speaker 2: come in a bit for the fourth quarter.

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Speaker 1: And so I guess look at even further into twenty

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Speaker 1: twenty five, do you think consensus is underestimating a rebound

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Speaker 1: or do you think that they're overestimating a recovery in

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Speaker 1: the market, or kind of what are your thoughts in

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Speaker 1: twenty twenty five.

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Speaker 2: I think consensus estimates are generally too high for the

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Speaker 2: truckload space and most of the early cycle space, and

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Speaker 2: frankly we can probably include LTL in this as well,

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Speaker 2: So it depends on how you want to define all

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Speaker 2: of that. But I think numbers probably are a little

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Speaker 2: too high. There's some pretty meaningful increases included. You know,

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Speaker 2: this is going to be an interesting dynamic where contract

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Speaker 2: rates and spot rates have come in quite a bit.

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Speaker 2: I think the positive thing when we talk to our

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Speaker 2: carriers is that spot rates for the large public companies

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Speaker 2: were above contract rates through essentially the entire third quarter,

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Speaker 2: which is a good step in the right direction. I

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Speaker 2: think bodes well for a degree of rate improvement in

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Speaker 2: twenty twenty five. I think the question is how much

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Speaker 2: will they get? And I think you need a combination

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Speaker 2: of both rate improvement as well as utilization improvement, because

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Speaker 2: we know costs are still relatively elevated. So that's kind

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Speaker 2: of the dynamic that we're looking for here that gets

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Speaker 2: us a little bit concerned about next year's numbers. We're

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Speaker 2: kind of five to ten percent below the street across

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Speaker 2: most of the names in our TL coverage.

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Speaker 1: Right and there are some potential catalysts that we're going

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Speaker 1: through right now, and I guess we're kind of a

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Speaker 1: wait and see how big of an a pack there's

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Speaker 1: going to be. You know, there was Hurricane Helene, there's

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Speaker 1: another hurricane coming expected to hit Florida later this week.

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Speaker 1: Then you obviously had the three day port strike, which

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Speaker 1: is you know, snarling supply chains. Do you do you

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Speaker 1: think those things could be the spark that could really

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Speaker 1: drive a much tighter spot market.

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Speaker 2: I think I think there's been some hope around that.

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Speaker 2: You know, while the hurricane activity has been devastating to

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Speaker 2: local communities, I don't know how impactful it has been

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Speaker 2: to tightening up the freight market so far. The porch strike,

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Speaker 2: which I think people were also looking towards as being

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Speaker 2: something that was a catalyst for a surgeon freight once

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Speaker 2: it reopened after some degree of a shutdown, I think

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Speaker 2: that probably is turning out to be a little bit

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Speaker 2: weaker than the positive expectations folks had. It was only

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Speaker 2: closed for a few days, which probably doesn't mean that

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Speaker 2: there's necessarily a big surge or freight coming in. As

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Speaker 2: those ports are the backlogs are cleared up, So I

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Speaker 2: think the combination of those factors has maybe been slightly

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Speaker 2: disappointing relative to expectations around it. I hate to use

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Speaker 2: those terms because the realities these are human tragedies and

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Speaker 2: they are what they are. But in terms of the

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Speaker 2: catalyst dynamic on the truckload market, those probably have not

246
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Speaker 2: been as strong as some people's expectations. Obviously, we're watching

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Speaker 2: very closely the hurricane that's headed towards the Gulf coast

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Speaker 2: of Florida. It looks large and potentially disruptive, so that's

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Speaker 2: a possibility that you see things tighten up there. Usually

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Speaker 2: what happens in those scenarios is that a lot of

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Speaker 2: capacity moves out of the market, and then you have

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Speaker 2: capacity meaning to come back in for recovery effort to

253
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Speaker 2: rebuild those kinds of things. I guess the optimistic tone

254
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Speaker 2: that I would put on all of this, though, is

255
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Speaker 2: that these tend to have a tail that lasts a

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Speaker 2: little bit longer than an initial impact. And so you know,

257
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Speaker 2: as you can imagine, the process of recovery and rebuilding

258
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Speaker 2: in these areas can take months to play out. So

259
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Speaker 2: if we look back to say the twenty seventeen which

260
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Speaker 2: was a very active hurricane season and ultimately acted as

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Speaker 2: a catalyst to push us into what was a much

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Speaker 2: better freight environment twenty eighteen, that improvement in the truckload

263
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Speaker 2: spot rate market happened really over a couple of months,

264
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Speaker 2: So it's more like two to three months as opposed

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Speaker 2: to something like two to three weeks. So we may

266
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Speaker 2: see this still be a little bit more constructive as

267
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Speaker 2: we go forward, but on the margin, a little bit

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Speaker 2: less positive than we were expecting so far.

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Speaker 1: Yeah. I don't want to put words in your mouth,

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Speaker 1: but you know, you see them relatively mah on the

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Speaker 1: truckload market. You know, yet you have an overweight on

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Speaker 1: Night Swift and JB. Hunt. Obviously they're not pure play

273
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Speaker 1: truckload carriers. Can you talk about, you know, what's driving

274
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Speaker 1: those those overweight ratings that you have on those two carriers.

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Speaker 2: Yeah, let's take Night first. I mean, I think the

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Speaker 2: story on Night I think is quite interesting and there's

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Speaker 2: absolutely a cyclical component to it, There's no doubt about it.

278
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Speaker 2: And when we launched back in June with the stock

279
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Speaker 2: in the mid forties, we thought it looked relatively attractive

280
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Speaker 2: for relatively low expectations, and I still think that that's

281
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Speaker 2: generally speaking the case. So there's a couple of things

282
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Speaker 2: at play here. Number One, Night is not, as you noted,

283
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Speaker 2: a pure one percent pure play truckload carrier, although it's

284
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Speaker 2: going to trade like one. They do have an LTL

285
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Speaker 2: business which they're in the process of growing, which we

286
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Speaker 2: think adds some earnings power through the cycle. They also

287
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Speaker 2: have the acquisition of US Express, which they're in the

288
00:14:14,880 --> 00:14:17,319
Speaker 2: process of improving, which I think will add to earnings

289
00:14:17,320 --> 00:14:20,480
Speaker 2: power through the truckload cycle. They're coming off of what

290
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Speaker 2: has been a really bad period of time for the

291
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Speaker 2: insurance venture that they tried a couple of years ago.

292
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Speaker 2: That ended up losing them quite a bit of money.

293
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Speaker 2: So as we're looking at their earnings base right now,

294
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Speaker 2: which is give or take a dollar, it does look

295
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Speaker 2: really depressed relative to what kind of normalized earnings should

296
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Speaker 2: be at this point in the cycle. So if we

297
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Speaker 2: think about that context and then maybe what peak earnings

298
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Speaker 2: could look like when you have full USX contribution, full

299
00:14:46,120 --> 00:14:49,680
Speaker 2: LTL contribution, I do think that we're talking about a

300
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Speaker 2: number that's in the high threes or maybe close to

301
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Speaker 2: four dollars. You put a normalized multiple on that, and

302
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Speaker 2: you can still get a stock into the mid sixties.

303
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Speaker 2: And I think that is the bual case here. But

304
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Speaker 2: until very clear, and this is what we've said, until

305
00:15:01,880 --> 00:15:06,200
Speaker 2: we get more certainty on the cycle moving constructively positive,

306
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Speaker 2: you're going to trade in the range and we're comfortable

307
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Speaker 2: being long this name, you know, on the lower end

308
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Speaker 2: of the range, which is where we are now. Use

309
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Speaker 2: fifty dollars as kind of a break point, and then

310
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Speaker 2: as you get into the mid fifties, this is probably

311
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Speaker 2: something that kind of runs out of gas until we

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Speaker 2: get that greater clarity on the cycle.

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Speaker 1: Do you think, like the knights in the JB Hunts

314
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Speaker 1: of the world they're creating, you know better, I guess

315
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Speaker 1: investment vehicles for people that want to be involved in

316
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Speaker 1: free because you know, as you've been covering this space

317
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Speaker 1: a long time, a truckloads name is a hard buy

318
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Speaker 1: and hold kind of recommendation just given the cyclicality. You know,

319
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Speaker 1: they're almost like airlines. So so you know, did you

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Speaker 1: see that changing significantly with the changes that these companies

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Speaker 1: are undergoing.

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Speaker 2: I mean, I think I think both of them, and

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Speaker 2: maybe Nights more so than JB. Hunt. Javy Hunt's execution

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Speaker 2: of change probably happened, you know, ten plus years ago.

325
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Speaker 2: Night is in the process of doing it now, I

326
00:16:02,600 --> 00:16:05,200
Speaker 2: think to some degree, yes, And the addition of the

327
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Speaker 2: LTL business and the growth of that business I think

328
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Speaker 2: is a big piece of that. We've always argued though,

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Speaker 2: that it takes a lot of earnings power from your

330
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Speaker 2: non core segment, essentially making the non core segment become

331
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Speaker 2: another core piece of your business before you get that

332
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Speaker 2: multiple rerating and before you trade more, say like an

333
00:16:25,480 --> 00:16:28,120
Speaker 2: LTL company in the case of Night. So it'll take

334
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Speaker 2: some time to play out. But what I think management

335
00:16:30,040 --> 00:16:32,960
Speaker 2: team is doing here in terms of growing that business,

336
00:16:33,320 --> 00:16:37,360
Speaker 2: focusing on their core competency of acquiring assets that in

337
00:16:37,400 --> 00:16:40,480
Speaker 2: some cases need some help or to be fixed up

338
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Speaker 2: is ultimately the right path for them, and I think

339
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Speaker 2: it's value a creative over time. It just does take time,

340
00:16:45,840 --> 00:16:48,440
Speaker 2: and the cycle right now is going to be more

341
00:16:48,440 --> 00:16:50,640
Speaker 2: powerful than anything that management team's going to be doing

342
00:16:50,680 --> 00:16:52,560
Speaker 2: to build that story longer term.

343
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Speaker 1: Right And so you JB. Hunt, I think is the

344
00:16:55,960 --> 00:16:58,240
Speaker 1: probably the first name that you cover that's going to

345
00:16:58,240 --> 00:17:03,720
Speaker 1: be report earnings. So they're obviously going to provide a

346
00:17:03,800 --> 00:17:06,480
Speaker 1: read through for a lot of transportation companies just given

347
00:17:06,600 --> 00:17:09,520
Speaker 1: the various businesses that they have. You what are you

348
00:17:09,560 --> 00:17:12,399
Speaker 1: expecting for JB. Hunt in the third quarter?

349
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Speaker 2: Yeah, so we're below the street for earnings on JB

350
00:17:15,800 --> 00:17:19,240
Speaker 2: Hunt for EPs for Hunt in the third quarter. Where

351
00:17:19,240 --> 00:17:21,119
Speaker 2: we are a little more optimistic though, is in the

352
00:17:21,160 --> 00:17:24,600
Speaker 2: mix of those earnings. So intermodal should be the segment

353
00:17:24,720 --> 00:17:29,240
Speaker 2: that probably does the best relatively speaking, particularly versus the

354
00:17:29,280 --> 00:17:34,800
Speaker 2: second quarter. So we're optimistic that volume growth sequentially has

355
00:17:34,840 --> 00:17:38,920
Speaker 2: been a bit better than normal seasonality. Pricing's probably still

356
00:17:38,960 --> 00:17:42,600
Speaker 2: in the process of finding that ultimate bottom of this cycle.

357
00:17:43,000 --> 00:17:46,120
Speaker 2: And so sequentially, the net of those two things means

358
00:17:46,160 --> 00:17:49,520
Speaker 2: you'll have more earnings coming from intermodal in three Q

359
00:17:49,720 --> 00:17:52,560
Speaker 2: than you did in two Q. The rest of the

360
00:17:52,560 --> 00:17:57,360
Speaker 2: businesses dedicated FMS, truck and their brokerage business probably are

361
00:17:57,440 --> 00:18:01,080
Speaker 2: flat to modestly lower sequentially, and so that's why we

362
00:18:01,160 --> 00:18:04,360
Speaker 2: can't get a big uplift in EPs from three Q.

363
00:18:05,000 --> 00:18:07,120
Speaker 2: From two Q to three Q. That's why we come

364
00:18:07,119 --> 00:18:09,639
Speaker 2: in below the street. I think the reality, though, is

365
00:18:09,640 --> 00:18:13,440
Speaker 2: if the company beats on intermodal but ultimately misses earnings

366
00:18:13,440 --> 00:18:16,080
Speaker 2: because some of these other segments are a little bit softer,

367
00:18:16,320 --> 00:18:18,520
Speaker 2: I don't know that that matters as much because intermodial

368
00:18:18,560 --> 00:18:20,960
Speaker 2: still is the most important thing for JB. Hunt, and

369
00:18:21,000 --> 00:18:23,240
Speaker 2: if we're starting to see them taking advantage of some

370
00:18:23,280 --> 00:18:25,320
Speaker 2: of the volume that's been so strong on the West Coast,

371
00:18:25,560 --> 00:18:27,679
Speaker 2: I think ultimately that's probably not the worst thing for

372
00:18:27,720 --> 00:18:28,080
Speaker 2: the stock.

373
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Speaker 1: Right As brokerage business has been a drag on the

374
00:18:30,760 --> 00:18:32,639
Speaker 1: company for a while, when do you expect that to

375
00:18:32,680 --> 00:18:33,480
Speaker 1: turn around?

376
00:18:33,760 --> 00:18:35,439
Speaker 2: We're hopeful that we're going to start to see some

377
00:18:35,440 --> 00:18:38,600
Speaker 2: more meaningful improvement on that in twenty twenty five. We'd

378
00:18:38,640 --> 00:18:40,040
Speaker 2: expect a company to do a little bit better in

379
00:18:40,119 --> 00:18:42,560
Speaker 2: terms of disclosing some of the headwinds that they've been

380
00:18:42,560 --> 00:18:45,520
Speaker 2: facing through the BNS Logistics acquisition that they made, so

381
00:18:45,560 --> 00:18:47,080
Speaker 2: that has been a headwind, and we think it's been

382
00:18:47,119 --> 00:18:50,360
Speaker 2: a semi material headwind for the profitability on a quarterly

383
00:18:50,400 --> 00:18:53,399
Speaker 2: basis really for the last three quarters. So hopefully we

384
00:18:53,480 --> 00:18:56,080
Speaker 2: will turn the corner on that in twenty twenty five,

385
00:18:56,400 --> 00:18:58,040
Speaker 2: we'll start to see the numbers look better. But we

386
00:18:58,119 --> 00:19:00,440
Speaker 2: really need to see this management team really kind of

387
00:19:00,440 --> 00:19:02,720
Speaker 2: focusing on the cost side there. This is going to

388
00:19:02,720 --> 00:19:05,080
Speaker 2: be a combination of obviously a market that's not super

389
00:19:05,119 --> 00:19:08,280
Speaker 2: cooperative for brokers in general, but also their ability to

390
00:19:08,320 --> 00:19:10,240
Speaker 2: really start to pull back on some of the costs.

391
00:19:10,240 --> 00:19:12,320
Speaker 2: They built out this business to support a lot of

392
00:19:12,359 --> 00:19:14,600
Speaker 2: growth over a long period of time, and it's been

393
00:19:14,640 --> 00:19:17,000
Speaker 2: frankly disappointing. I do think they need to kind of

394
00:19:17,040 --> 00:19:20,240
Speaker 2: address that a little bit more aggressively by pulling down

395
00:19:20,240 --> 00:19:22,080
Speaker 2: some of the costs and the sort of inherent cost

396
00:19:22,119 --> 00:19:24,879
Speaker 2: structure around it to be able to get it more profitable.

397
00:19:24,960 --> 00:19:27,720
Speaker 2: So step in the right direction in twenty twenty five.

398
00:19:27,800 --> 00:19:31,320
Speaker 2: We're not sure it necessarily is all that profitable though

399
00:19:31,359 --> 00:19:32,880
Speaker 2: still in twenty twenty five.

400
00:19:32,960 --> 00:19:34,840
Speaker 1: Right, so, you know, we talked a little about truck

401
00:19:34,920 --> 00:19:37,240
Speaker 1: and we talked a little about rails. So like the

402
00:19:37,280 --> 00:19:41,480
Speaker 1: integrated logistics providers or parcel providers like UPS and FedEx,

403
00:19:42,480 --> 00:19:46,480
Speaker 1: what's going on there. They seem to be doing a lot,

404
00:19:46,560 --> 00:19:49,640
Speaker 1: but still also struggling a little bit.

405
00:19:50,040 --> 00:19:53,120
Speaker 2: Yeah, I'd say that the fundamental backdrop of the parcel

406
00:19:53,200 --> 00:19:58,320
Speaker 2: market has not been has not been great. The introduction

407
00:19:58,760 --> 00:20:03,639
Speaker 2: of tenuously sort of bad mix business has been a

408
00:20:03,680 --> 00:20:06,679
Speaker 2: hallmark of parcel for an extended period of time, and

409
00:20:06,720 --> 00:20:09,840
Speaker 2: that goes back to the introduction of e commerce or

410
00:20:09,960 --> 00:20:12,760
Speaker 2: B two C versus B to B many many years ago,

411
00:20:13,320 --> 00:20:15,639
Speaker 2: the rise of Amazon and the fact that you're starting

412
00:20:15,640 --> 00:20:19,160
Speaker 2: to see volume flow through the networks for shorter periods

413
00:20:19,160 --> 00:20:21,840
Speaker 2: and then ultimately being delivered to residences where you have

414
00:20:22,000 --> 00:20:25,159
Speaker 2: less density. And now just in the last couple of quarters,

415
00:20:25,160 --> 00:20:28,400
Speaker 2: we've seen this rise a very low cost and low

416
00:20:28,560 --> 00:20:32,240
Speaker 2: value international freight moving through their networks. For UPS that

417
00:20:32,359 --> 00:20:36,520
Speaker 2: manifested with domestic volume going very short haul for customers

418
00:20:36,520 --> 00:20:39,720
Speaker 2: like Timu and Shean, and then for FedEx it was

419
00:20:40,440 --> 00:20:43,520
Speaker 2: very sort of low value freight forwarding air freight that

420
00:20:43,600 --> 00:20:47,120
Speaker 2: rolled through their international business that ended up hurting their

421
00:20:47,160 --> 00:20:50,040
Speaker 2: margins and their last fiscal quarter that they reported, so

422
00:20:50,440 --> 00:20:52,879
Speaker 2: that backdrop has been challenging, and the reality is the

423
00:20:52,920 --> 00:20:55,240
Speaker 2: growth has been happening in all of those very sort

424
00:20:55,280 --> 00:20:57,919
Speaker 2: of bad mix categories. So it's been up to the

425
00:20:57,920 --> 00:21:00,880
Speaker 2: companies to try to find ways to pull costs out

426
00:21:00,880 --> 00:21:03,879
Speaker 2: of the system and get more productive to ultimately offset that.

427
00:21:05,080 --> 00:21:08,800
Speaker 2: They've been maybe marginally successful in both cases with FedEx

428
00:21:08,840 --> 00:21:12,200
Speaker 2: and UPS in that respect as it stands right now

429
00:21:12,280 --> 00:21:16,000
Speaker 2: following the last quarter, you know, FedEx risk rewards seems

430
00:21:16,040 --> 00:21:18,879
Speaker 2: to be reasonably constructive at this point with not a

431
00:21:18,880 --> 00:21:22,200
Speaker 2: lot of downside and maybe some upside coming from a

432
00:21:22,200 --> 00:21:26,400
Speaker 2: better cost performance in the next several quarters, as well

433
00:21:26,440 --> 00:21:29,800
Speaker 2: as the potential for an LTL spin. And then with UPS,

434
00:21:30,240 --> 00:21:32,560
Speaker 2: you know, we're a little bit worried about the fourth

435
00:21:32,640 --> 00:21:36,040
Speaker 2: quarter because we think expectations are probably still elevated. That's

436
00:21:36,080 --> 00:21:37,679
Speaker 2: a theme You've heard me say quite a bit so

437
00:21:37,760 --> 00:21:40,119
Speaker 2: far on this in our conversation. Is the fourth quarter

438
00:21:40,400 --> 00:21:42,000
Speaker 2: looked like there's a little bit more risk than the

439
00:21:42,040 --> 00:21:43,200
Speaker 2: third quarter for UPS.

440
00:21:44,440 --> 00:21:47,080
Speaker 1: Gotcha, So is there one you like more than the others?

441
00:21:47,280 --> 00:21:47,399
Speaker 2: Uh?

442
00:21:47,920 --> 00:21:49,480
Speaker 1: You know, FedEx over UPS.

443
00:21:49,760 --> 00:21:52,520
Speaker 2: Yeah, I see, you know, we're overweight rated on UPS

444
00:21:52,520 --> 00:21:56,560
Speaker 2: and the thesis there continues to be that we are entering,

445
00:21:56,720 --> 00:21:58,720
Speaker 2: you know, we just entered on August first, year two

446
00:21:58,800 --> 00:22:02,320
Speaker 2: of the Teamster contract, which is a significant increase in costs,

447
00:22:02,800 --> 00:22:06,720
Speaker 2: but the increase or inflation in that contract in year

448
00:22:06,720 --> 00:22:09,960
Speaker 2: two steps meaningfully down from about ten percent year one

449
00:22:10,040 --> 00:22:12,800
Speaker 2: to just under two percent in year two. So with

450
00:22:12,960 --> 00:22:15,600
Speaker 2: a more stable cost base that's not inflating at the

451
00:22:15,600 --> 00:22:19,360
Speaker 2: same pace, coupled with volume growth returning to the network

452
00:22:19,440 --> 00:22:21,679
Speaker 2: like it is right now and some I think pretty

453
00:22:21,720 --> 00:22:24,720
Speaker 2: decent search charges around the peak season and using fuel

454
00:22:24,760 --> 00:22:27,760
Speaker 2: search charges of pricing mechanism should get a return of

455
00:22:27,800 --> 00:22:31,880
Speaker 2: profit growth and ultimately earnings power. Again, it's always about

456
00:22:31,920 --> 00:22:35,080
Speaker 2: where expectations sit versus execution, so we have to be

457
00:22:35,160 --> 00:22:37,760
Speaker 2: somewhat careful about how far we get out over our

458
00:22:37,800 --> 00:22:41,320
Speaker 2: skis here. But at this valuation, with a solid dividend deal,

459
00:22:41,480 --> 00:22:45,200
Speaker 2: decent free cash support, and maybe some catalyst for turning

460
00:22:45,200 --> 00:22:47,560
Speaker 2: the corner on better earnings power as we move into

461
00:22:47,600 --> 00:22:51,120
Speaker 2: calendar twenty twenty five, that remains our overweight while FedEx

462
00:22:51,200 --> 00:22:53,960
Speaker 2: is equal weight. Although, like I noted, tactically or from

463
00:22:54,000 --> 00:22:56,560
Speaker 2: a risk reward perspective, you know, we think that there's

464
00:22:57,160 --> 00:22:58,920
Speaker 2: not a bad story of FedEx.

465
00:22:58,600 --> 00:23:02,480
Speaker 1: Either fed X. You know, they're doing a lot of

466
00:23:02,520 --> 00:23:06,479
Speaker 1: structural stuff. They kind of move their ground and express

467
00:23:06,560 --> 00:23:10,760
Speaker 1: business into one business. From a reporting standpoint, what do

468
00:23:10,800 --> 00:23:12,240
Speaker 1: you think, how do you think fed X is going

469
00:23:12,320 --> 00:23:15,040
Speaker 1: to look like a year from now? Do you you know?

470
00:23:15,080 --> 00:23:18,000
Speaker 1: And they also have a strategic review for their LTL business.

471
00:23:18,000 --> 00:23:21,240
Speaker 1: They're less than truckload business FedEx rate. How do you

472
00:23:21,480 --> 00:23:25,000
Speaker 1: see them looking, you know, because it seems like they're

473
00:23:25,000 --> 00:23:27,520
Speaker 1: trying to figure out what businesses they should keep and

474
00:23:27,800 --> 00:23:30,320
Speaker 1: I don't necessarily you know, it could go beyond what

475
00:23:30,359 --> 00:23:31,360
Speaker 1: they're doing in the freight.

476
00:23:32,680 --> 00:23:35,480
Speaker 2: Yeah, So you know, I think the short answer is

477
00:23:35,520 --> 00:23:39,440
Speaker 2: we expect a freight spin. So if the company truly

478
00:23:39,560 --> 00:23:44,280
Speaker 2: is looking at creating shareholder value here, we think that

479
00:23:44,400 --> 00:23:48,359
Speaker 2: it's demonstrable that the LTL business can be valued at

480
00:23:48,400 --> 00:23:51,040
Speaker 2: a relatively high multiple compared to where the stock is

481
00:23:51,080 --> 00:23:54,280
Speaker 2: trading today. And I do think that even remain Co,

482
00:23:54,400 --> 00:23:57,240
Speaker 2: which would be the parcel business and the corporate side,

483
00:23:57,640 --> 00:24:00,200
Speaker 2: is still got a degree of value, particularly as they're

484
00:24:00,240 --> 00:24:02,440
Speaker 2: executing on their drive cost savings and they have their

485
00:24:02,480 --> 00:24:05,000
Speaker 2: network two point zero sort of consolidation of express and

486
00:24:05,000 --> 00:24:07,919
Speaker 2: ground coming. So I think that's ultimately going to be

487
00:24:07,960 --> 00:24:10,000
Speaker 2: the most obvious thing is that you probably will have

488
00:24:10,040 --> 00:24:12,680
Speaker 2: a separate LTL company trading on its own, and then

489
00:24:12,720 --> 00:24:15,479
Speaker 2: you'll have remain code, which will basically be its parcel business.

490
00:24:15,480 --> 00:24:18,119
Speaker 2: It's express and its ground business combined together. And that's

491
00:24:18,119 --> 00:24:19,240
Speaker 2: probably the most obvious thing.

492
00:24:20,359 --> 00:24:22,719
Speaker 1: And do you see like at a major difference in like,

493
00:24:22,960 --> 00:24:25,960
Speaker 1: you know, their independent contractor model that they have, because

494
00:24:26,000 --> 00:24:28,359
Speaker 1: it's obviously very different than DPS, which is union and

495
00:24:28,400 --> 00:24:28,959
Speaker 1: I shop.

496
00:24:29,840 --> 00:24:32,119
Speaker 2: I think the you know, one of the potential consequences

497
00:24:32,160 --> 00:24:35,600
Speaker 2: of connecting those or consolidating both the express and the

498
00:24:35,600 --> 00:24:37,840
Speaker 2: ground business is that you will have to see some

499
00:24:38,200 --> 00:24:42,240
Speaker 2: evolution of that independent contractor business. And the reason why

500
00:24:42,240 --> 00:24:44,000
Speaker 2: I say that is, you know, on the express side,

501
00:24:44,040 --> 00:24:47,960
Speaker 2: they have employees delivering for them because there are there's

502
00:24:48,040 --> 00:24:51,119
Speaker 2: time definition to the packages, meaning when they their truck,

503
00:24:51,160 --> 00:24:54,399
Speaker 2: that express truck leaves the distribution center in the morning,

504
00:24:54,920 --> 00:24:57,119
Speaker 2: there are certain packages on that car that have to

505
00:24:57,240 --> 00:24:59,320
Speaker 2: get to people before ten thirty. They's some that need

506
00:24:59,400 --> 00:25:01,240
Speaker 2: to get there later in the day, and there's different

507
00:25:01,320 --> 00:25:03,680
Speaker 2: routes that that has to take. And it's a mandate

508
00:25:03,960 --> 00:25:06,479
Speaker 2: on the independent contractor side. The way that FedEx kind

509
00:25:06,520 --> 00:25:09,679
Speaker 2: of avoids having too much control over the independent contractors,

510
00:25:09,760 --> 00:25:12,800
Speaker 2: is basically tendering them, you know, a number of packages

511
00:25:12,840 --> 00:25:15,280
Speaker 2: in the morning and allowing that independent contractor to do

512
00:25:15,359 --> 00:25:18,240
Speaker 2: his route as he sees here, she sees fit over

513
00:25:18,240 --> 00:25:20,240
Speaker 2: the course of the day. When you have the two

514
00:25:20,240 --> 00:25:21,919
Speaker 2: of them together, you're going to have express packages that

515
00:25:22,000 --> 00:25:25,120
Speaker 2: have time definition and ground packages which have day definition

516
00:25:25,200 --> 00:25:27,119
Speaker 2: in the same car. It's going to be hard to

517
00:25:27,200 --> 00:25:29,560
Speaker 2: do that and maintain that arm's length sort of non

518
00:25:29,680 --> 00:25:33,080
Speaker 2: control aspect that you need for an independent contractor. So

519
00:25:33,480 --> 00:25:37,560
Speaker 2: we would expect to see more of the express drivers

520
00:25:37,760 --> 00:25:41,679
Speaker 2: winning more volume relative to the independent contractors. Who wouldn't

521
00:25:41,680 --> 00:25:44,280
Speaker 2: be surprised to see that IC number begin to fall

522
00:25:44,600 --> 00:25:47,159
Speaker 2: as we go through this, you know, this combination of

523
00:25:47,400 --> 00:25:49,360
Speaker 2: express and ground. So I don't know that they necessarily

524
00:25:49,440 --> 00:25:51,960
Speaker 2: go away altogether. We wouldn't expect that, but we think

525
00:25:51,960 --> 00:25:53,680
Speaker 2: it's going to be kind of case by case basis.

526
00:25:54,040 --> 00:25:58,679
Speaker 1: Gotcha, So changing gears a little bit. I mean, so

527
00:25:58,880 --> 00:26:03,040
Speaker 1: you know you just mentioned earlier you recently launched coverage

528
00:26:03,240 --> 00:26:07,360
Speaker 1: at Wells Fargo. This isn't your first rodeo you've You've

529
00:26:07,359 --> 00:26:09,639
Speaker 1: done it at a couple of shops now and just

530
00:26:09,720 --> 00:26:12,280
Speaker 1: you know, it's always great to hear people's perspective. So

531
00:26:12,520 --> 00:26:15,159
Speaker 1: for like those budding seal side analysts out there that

532
00:26:15,520 --> 00:26:18,480
Speaker 1: are listening, you know, what do you like most about

533
00:26:18,480 --> 00:26:21,800
Speaker 1: your role as a senior analysts covering the freight transportation

534
00:26:21,880 --> 00:26:23,080
Speaker 1: logistics market?

535
00:26:24,080 --> 00:26:26,280
Speaker 2: These are a couple of things. I mean, number one,

536
00:26:26,320 --> 00:26:28,480
Speaker 2: you have you never know what your your day is

537
00:26:28,520 --> 00:26:30,520
Speaker 2: going to have in store for you, So there you know,

538
00:26:30,600 --> 00:26:32,800
Speaker 2: you can try to control and map out what you

539
00:26:32,840 --> 00:26:36,520
Speaker 2: want to do, but ultimately the market dictate dictates and

540
00:26:36,560 --> 00:26:39,439
Speaker 2: the companies you cover dictate a lot of what you

541
00:26:39,480 --> 00:26:41,040
Speaker 2: do on a day to day basis. So that's the

542
00:26:41,080 --> 00:26:43,640
Speaker 2: first piece. So there's the unpredictability about it. I think

543
00:26:43,640 --> 00:26:45,480
Speaker 2: the other piece, there's a couple of other things that

544
00:26:45,520 --> 00:26:47,560
Speaker 2: are great about it, And this is one of the

545
00:26:47,560 --> 00:26:49,199
Speaker 2: best jobs on Wall Street I think you can have.

546
00:26:49,720 --> 00:26:51,960
Speaker 2: I think it's talking to extremely smart people. And that's

547
00:26:51,960 --> 00:26:54,080
Speaker 2: both on the corporate side, where we get the opportunity

548
00:26:54,200 --> 00:26:56,520
Speaker 2: very lucky to have the opportunity to get regular access

549
00:26:56,520 --> 00:26:59,280
Speaker 2: to CE level executives at the companies that we cover

550
00:26:59,600 --> 00:27:02,080
Speaker 2: and really understand how they want to manage the business

551
00:27:02,080 --> 00:27:04,679
Speaker 2: and their strategic vision for these businesses I think is

552
00:27:04,720 --> 00:27:07,320
Speaker 2: really fascinating. And then the investment community. Some of the

553
00:27:07,359 --> 00:27:09,800
Speaker 2: smartest people we've ever met are on the investment side,

554
00:27:10,000 --> 00:27:12,399
Speaker 2: and it's great to exchange ideas with those folks and

555
00:27:12,440 --> 00:27:16,960
Speaker 2: have really vigorous debates around ideas and stocks. And so

556
00:27:17,040 --> 00:27:19,600
Speaker 2: I think that is really a lot about it. And

557
00:27:19,640 --> 00:27:22,840
Speaker 2: then the last piece is, while I sit under the

558
00:27:22,880 --> 00:27:27,639
Speaker 2: Wells Fargo equity research umbrella, we are to some extent

559
00:27:27,760 --> 00:27:32,160
Speaker 2: running our own individual franchises, so we can structure our

560
00:27:32,240 --> 00:27:34,679
Speaker 2: research product the way that we want to and we

561
00:27:34,760 --> 00:27:37,080
Speaker 2: have a lot of autonomy in doing that, and I

562
00:27:37,080 --> 00:27:39,640
Speaker 2: really appreciate that and it kind of makes it fun. Essentially,

563
00:27:39,720 --> 00:27:42,200
Speaker 2: this is a whiteboard. We can decide how we want

564
00:27:42,240 --> 00:27:45,040
Speaker 2: to go to market. We can ultimately pitch ideas that

565
00:27:45,080 --> 00:27:48,000
Speaker 2: we think are interesting and can make our clients money.

566
00:27:48,440 --> 00:27:49,760
Speaker 2: We can do it in the manner we want to

567
00:27:49,760 --> 00:27:51,399
Speaker 2: do it. So I think the combination of all of

568
00:27:51,440 --> 00:27:53,840
Speaker 2: those really does make it a really interesting job.

569
00:27:54,760 --> 00:27:57,119
Speaker 1: And you also forgot to mention in terms of the

570
00:27:57,200 --> 00:27:59,960
Speaker 1: really smart people they get talked to, the Bloomberg intelligence

571
00:28:00,400 --> 00:28:01,200
Speaker 1: analysts as well.

572
00:28:01,359 --> 00:28:03,000
Speaker 2: I can't leave you outle this is this is one

573
00:28:03,040 --> 00:28:05,000
Speaker 2: of these are some of the best conversations I get

574
00:28:05,040 --> 00:28:05,280
Speaker 2: to have.

575
00:28:05,800 --> 00:28:08,560
Speaker 1: Yeah, and then just you know, if you could share

576
00:28:08,680 --> 00:28:11,760
Speaker 1: what is the launching process at a sale side shop,

577
00:28:11,840 --> 00:28:14,439
Speaker 1: Like how long does it take? You know, what does

578
00:28:14,480 --> 00:28:16,560
Speaker 1: it look like for people that are maybe interested in

579
00:28:16,600 --> 00:28:17,600
Speaker 1: getting to the industry.

580
00:28:18,400 --> 00:28:21,280
Speaker 2: Sure, I mean so for someone like me who spent

581
00:28:21,400 --> 00:28:25,639
Speaker 2: fourteen years at another firm and then moved over, you know,

582
00:28:26,280 --> 00:28:28,840
Speaker 2: to pull back the curtain, we get what's called garden leaves.

583
00:28:28,840 --> 00:28:30,800
Speaker 2: So there is a non compete period of time where

584
00:28:30,840 --> 00:28:34,960
Speaker 2: I need to sit out, which is not a bad thing. Necessarily,

585
00:28:35,000 --> 00:28:36,719
Speaker 2: you get a little bit of downtime, you get to refresh,

586
00:28:36,800 --> 00:28:38,560
Speaker 2: get to you get to know your family a little

587
00:28:38,560 --> 00:28:40,480
Speaker 2: bit more because you've probably been pretty busy for the

588
00:28:40,520 --> 00:28:43,320
Speaker 2: last bunch of years working. But it's a great opportunity

589
00:28:43,360 --> 00:28:45,520
Speaker 2: to reset, you know, kind of recharge the battery. So

590
00:28:45,560 --> 00:28:47,680
Speaker 2: that that was very nice, and I had I did

591
00:28:47,720 --> 00:28:50,240
Speaker 2: have some time to do that between the firms I

592
00:28:50,280 --> 00:28:52,840
Speaker 2: was working in. But then ultimately when you land back

593
00:28:52,880 --> 00:28:56,600
Speaker 2: at the new place, it is a sprint to some extent.

594
00:28:56,680 --> 00:28:58,880
Speaker 2: So we had been in the market and obviously covered

595
00:28:58,880 --> 00:29:00,760
Speaker 2: the space for a really long time. So some people

596
00:29:00,760 --> 00:29:02,960
Speaker 2: who would be new would have a much different scenario

597
00:29:03,040 --> 00:29:07,640
Speaker 2: than we would. But from our franchise perspective, we rebuilt

598
00:29:07,680 --> 00:29:09,960
Speaker 2: all of our models as quickly as we possibly could.

599
00:29:10,560 --> 00:29:13,680
Speaker 2: And some of my team was in place before I joined,

600
00:29:13,680 --> 00:29:15,520
Speaker 2: so some of that happened before I was able to

601
00:29:15,520 --> 00:29:17,840
Speaker 2: come on board, which is really great. And then once

602
00:29:17,880 --> 00:29:20,960
Speaker 2: I was there, kind of reconnect with our companies due diligence,

603
00:29:21,000 --> 00:29:23,640
Speaker 2: speak with them, meet with them. You begin to sort

604
00:29:23,640 --> 00:29:27,280
Speaker 2: of reformulate our views. Now I've always was thinking about

605
00:29:27,280 --> 00:29:29,120
Speaker 2: the space because that's kind of what I've been doing

606
00:29:29,120 --> 00:29:32,360
Speaker 2: for the last twenty years, had some opinions and kind

607
00:29:32,360 --> 00:29:35,400
Speaker 2: of refreshed our expectations, and once we had the numbers right,

608
00:29:35,640 --> 00:29:37,280
Speaker 2: got to start to write a whole bunch of reports.

609
00:29:37,480 --> 00:29:40,520
Speaker 2: In our situation, we launched on seventeen companies, so we

610
00:29:40,560 --> 00:29:44,000
Speaker 2: had to write seventeen individual initiation reports kind of giving

611
00:29:44,000 --> 00:29:46,520
Speaker 2: investors or perspective of what we think the earning's power

612
00:29:46,560 --> 00:29:48,640
Speaker 2: and the stock opportunities were for each one of those

613
00:29:48,640 --> 00:29:53,720
Speaker 2: seventeen companies. And we also did two fairly large industry primers,

614
00:29:53,800 --> 00:29:56,400
Speaker 2: one on the rail space, one on truck and logistics,

615
00:29:56,440 --> 00:29:58,640
Speaker 2: where we gave people a concept of where we are

616
00:29:58,680 --> 00:30:01,760
Speaker 2: in the cycle, which is really important for companies within

617
00:30:01,800 --> 00:30:05,040
Speaker 2: the transportation sector because it is so cyclical. So that's

618
00:30:05,080 --> 00:30:07,520
Speaker 2: really what the actual nuts and bolts were for it.

619
00:30:07,800 --> 00:30:09,440
Speaker 2: And then you got to go through fun things like

620
00:30:09,520 --> 00:30:12,120
Speaker 2: internal committees to make sure that all of our views

621
00:30:12,160 --> 00:30:14,760
Speaker 2: and our work is vetted, and then ultimately launched that

622
00:30:14,880 --> 00:30:17,440
Speaker 2: out to not just the investment community, but also to

623
00:30:17,480 --> 00:30:19,800
Speaker 2: our internal salesforce so they can then go out and

624
00:30:20,080 --> 00:30:21,800
Speaker 2: talk to people with a broader reach than I have

625
00:30:21,880 --> 00:30:24,800
Speaker 2: the ability to reach myself. So it's a really interesting process,

626
00:30:24,840 --> 00:30:27,320
Speaker 2: but one in our case which happened on a very

627
00:30:27,360 --> 00:30:30,240
Speaker 2: expedited timeframe. So from the day I walked in the

628
00:30:30,280 --> 00:30:32,760
Speaker 2: door to the day that we launched was about three weeks.

629
00:30:32,800 --> 00:30:35,040
Speaker 2: I don't think I've ever done it any faster than that,

630
00:30:35,120 --> 00:30:37,680
Speaker 2: and I think we probably are pretty close to the

631
00:30:37,720 --> 00:30:39,440
Speaker 2: record as my guess.

632
00:30:39,360 --> 00:30:41,880
Speaker 1: All right, I really wanted to thank you for your time.

633
00:30:41,920 --> 00:30:44,800
Speaker 1: I always appreciate your insights. I always enjoyed talking with you,

634
00:30:44,920 --> 00:30:45,880
Speaker 1: so thank you so much.

635
00:30:46,720 --> 00:30:48,400
Speaker 2: Now. It's my pleasure. Lee always great to be out

636
00:30:48,440 --> 00:30:50,640
Speaker 2: with you. It's a great time, great conversation.

637
00:30:51,280 --> 00:30:52,880
Speaker 1: I also want to thank you for tuning in if

638
00:30:52,880 --> 00:30:55,320
Speaker 1: you liked the episode, please subscribe and leave a review.

639
00:30:55,400 --> 00:30:58,000
Speaker 1: We've lined up a number of great guests for the podcast,

640
00:30:58,040 --> 00:31:02,800
Speaker 1: so check back to here conversations with speed executives, shippers, regulators,

641
00:31:02,840 --> 00:31:06,000
Speaker 1: and decision makers within the freight markets. Also, if you

642
00:31:06,040 --> 00:31:09,120
Speaker 1: want to learn more about the freight transportation markets, check

643
00:31:09,160 --> 00:31:11,640
Speaker 1: our work on the Bloomberg Terminal at BI GO and

644
00:31:11,680 --> 00:31:14,880
Speaker 1: on social media. Take care and let's keep those supply

645
00:31:14,960 --> 00:31:23,400
Speaker 1: chains moving. Thanks everyone,