Schneider National, Inc. Q3 FY2024 earnings call

• Framework for structural improvements: focus on customer experience, freight allocation, capital allocation, cost management. - Truckload: Rate restoration with 85% of network contract renewals complete, mid-single digit rate improvements; aim to grow owner-operator fleet via Schneider's Freight Power platform. - Dedicated: Account churn down 50% from 2023, strong new business pipeline; two large greenfield start-ups pushed to 2025. - Intermodal: Earnings growth through execution and cost improvements; maintained pricing discipline, volume growth in West and Mexico. - Logistics: Solid profitability in competitive brokerage, adaptable to market changes.

Truckload: Revenue (excluding fuel surcharge) in third quarter was $532 million, 1% below prior year. Network truck business is challenged; focus on rate restoration (85% through network contract renewals with mid-single digit rate improvements) and growing owner-operator capacity. Dedicated: Average truck count down 66% sequentially, but tractor count up 17 units, account churn down 50% from 2023; represents 64% of truckload fleet. Intermodal: Revenues (excluding fuel surcharge) $265 million, 1% higher y-o-y. Earnings improved sequentially and grew over 40% y-o-y. Logistics: Revenue (excluding fuel surcharge) $314 million, 4% below prior year. Operating income $8 million, down from $9 million y-o-y.

• Full year 2024 adjusted diluted EPS guidance updated to $0.66 to $0.72. - Net CapEx guidance within $330 million range. - Expect fourth quarter earnings improvement, seasonality improvement in truckload network and logistics; project work and holiday season contribute to third to fourth quarter improvement.

• Insurance costs impacted by litigation, nuclear verdicts, rising premiums. - Volatile freight market conditions affecting volumes. - Delays in dedicated implementations impacting fourth quarter results.

Q: On full year guide and peak season, what are the assumptions?

A: Seasonality for holiday season and project work with improved margin performance contribute to third to fourth quarter improvement; some pull-forward effects in Intermodal from West Coast.

Q: What drove Trucking segment operating income down sequentially from 2Q to 3Q?

A: Network volume decline, higher insurance expense offset by rate increases on network side.

Q: Thoughts on insurance and operating supplies as percentage of revenue?

A: Insurance impacted by litigation and nuclear verdicts, efforts to reduce exposures; operating supplies affected by revenue not normalized and lower gains on equipment sales.

Q: Path to profitability for one-way operating?

A: Minimize network volatility by growing Dedicated, leveraging intermodal, and rate restoration via technology and owner-operator growth.

Q: Intermodal pricing outlook?

A: Remain disciplined, small price improvement from allocation season and network dynamics.

Q: CapEx guidance color?

A: Full year CapEx guidance $330 million, square in range due to productivity improvements and capital discipline.