Financial Data and Key Metrics Changes - The third quarter revenue was $839.6 million, a decrease of 0.3% compared to the previous year, reflecting the macroeconomic landscape [12][18] - The adjusted operating ratio increased to 87.6%, up from 85.1% a year ago, primarily due to a decrease in adjusted cost per shipment [18] - The diluted earnings per share were $3.22, down from $3.46 in the same quarter last year, while adjusted diluted earnings per share were $2.81 [18] Business Line Data and Key Metrics Changes - The ramping markets, consisting of 39 terminals opened since early 2022, improved their operating ratio by over 100 basis points compared to the second quarter, now operating at a sub-95 [4][5] - Shipments per workday decreased by 1.9% year-over-year but improved by 3.2% sequentially [8][12] - The cargo claims ratio was 0.54%, marking the fourth consecutive quarter below 0.6%, indicating strong service performance [7] Market Data and Key Metrics Changes - The company experienced a 3% sequential increase in shipments, but a 4.8% decrease compared to the third quarter of 2024 [9] - The fuel surcharge revenue increased by 2.1%, accounting for 15.2% of total revenue compared to 14.8% a year ago [12] - The overall freight market has shown softer trends in 2025, impacting shipment volumes [8][19] Company Strategy and Development Direction - The company is focused on customer service, network optimization, and cost control, with an emphasis on expanding its national footprint to enhance customer relationships [4][5] - A general rate increase of 5.9% was implemented on October 1, impacting approximately 25% of operating revenue [11] - The company aims to leverage its investments in network expansion to become a significant player in the less-than-truckload (LTL) industry [20][21] Management's Comments on Operating Environment and Future Outlook - Management noted that the economic backdrop remains uncertain, but the company is well-positioned to adapt and leverage its network investments [20][21] - The company anticipates that the current market conditions are in the early stages of realizing its full potential, with expectations for improved performance as the market stabilizes [21] - Management expressed confidence in the company's ability to maintain high service levels while managing costs effectively [19][20] Other Important Information - The company recorded a $14.5 million net operating expense reduction from a gain on real estate disposal and impairment [2] - Salaries, wages, and benefits increased by 0.7% year-over-year, driven by higher employee-related costs [13] - Accident claims and insurance expenses rose by 22.5% year-over-year, primarily due to existing claims development and inflation [17] Q&A Session Summary Question: Trends in October regarding tonnage and shipments - Management reported that shipments in October are down around 3.5%, with tonnage down about 4%, indicating a softer start to the month compared to expectations [24][25] Question: Updates on new terminals and their performance - Management highlighted that the new terminals are showing improved productivity and cost efficiency, with expectations for continued improvement as they mature [32][34] Question: Pricing environment and yield metrics - Management noted that the pricing environment remains disciplined, with a focus on maintaining yield metrics despite challenges in the market [40][41] Question: Network optimization efforts - Management discussed ongoing network optimization initiatives, emphasizing the importance of AI tools in improving operational efficiency [48][50] Question: Capacity and technology investments - Management indicated that the company has ample capacity across its network and continues to invest in technology to drive efficiencies [63][64] Question: Growth opportunities in a down year - Management expressed confidence in the ability to grow share-of-wallet with existing customers, even in a challenging economic environment [90][91]

Financial Data and Key Metrics Changes - The company reported adjusted EBITDA of $342 million and adjusted diluted EPS of $1.07, both exceeding expectations, with adjusted EBITDA growing by 3% year-over-year [5][14] - Total company revenue increased by 3% year-over-year to $2.1 billion, with LTL segment revenue also up to $1.3 billion [13][14] - Adjusted EBITDA in the LTL segment was up 9% to $308 million, and adjusted operating income increased by 10% to $217 million, both setting company records [14] Business Line Data and Key Metrics Changes - In the North American LTL business, adjusted operating income grew by 10% year-over-year to $217 million, with an adjusted operating ratio improvement of 150 basis points to 82.7% [5][14] - LTL adjusted EBITDA reached the highest level in company history at $308 million, reflecting strong operational execution and pricing strategies [6][14] - The company achieved a 5.9% year-over-year yield growth excluding fuel, with revenue per shipment also increasing sequentially for the 11th consecutive quarter [8][18] Market Data and Key Metrics Changes - Shipments per day in the LTL segment were down 3.5% year-over-year, while tonnage per day decreased by 6.1%, although both metrics improved compared to the second quarter [17][18] - The company reported a 48% decrease in purchased transportation expense, indicating improved cost efficiency through insourcing initiatives [13][14] Company Strategy and Development Direction - The company is focusing on high-growth freight markets and optimizing its network to enhance service quality and drive long-term cost efficiency [7][11] - Investments in AI and technology are expected to continue improving productivity and margins, with a strong emphasis on customer service and operational excellence [10][22] - The company aims to capture profitable share gains and strengthen its position in the market as the freight cycle turns [7][12] Management's Comments on Operating Environment and Future Outlook - Management noted that while the freight market remains soft, there is optimism for a recovery in 2026, with customers expressing expectations for improved demand [79][80] - The company anticipates continued above-market yield growth and margin expansion, even in the current macro environment [32][56] - Management emphasized the importance of maintaining service quality and operational efficiency to navigate the current challenges in the industry [71][72] Other Important Information - The company ended the quarter with $335 million in cash and a net leverage ratio of 2.4x trailing 12 months adjusted EBITDA [15] - The company is committed to moderating CapEx while increasing free cash flow conversion, positioning itself for greater flexibility in returning capital to shareholders [15][59] Q&A Session Summary Question: Insights on October tonnage and margin outlook - Management indicated that October tonnage is expected to be down around 3%, consistent with typical seasonality, and they expect to materially outperform seasonal trends in Q4 [24][26] Question: Thoughts on margin improvement into next year - Management expects strong OR improvement and earnings growth in 2026, even without a macro recovery, driven by above-market yield growth and cost control initiatives [31][32] Question: Pricing expectations for Q4 and beyond - Management anticipates yield growth excluding fuel to remain in the 5%-6% range, supported by ongoing pricing initiatives and service quality improvements [62][64] Question: Competitive environment and customer sentiment - Management noted that while demand remains soft, there is a neutral outlook from customers, with some optimism for 2026 as economic conditions improve [78][79]