Financial Data and Key Metrics Changes - The actual number of loads hauled via truck in Q1 2025 was 1.2% below Q1 2024, slightly above the high end of guidance range [12] - Actual revenue per truckload in Q1 2025 was 0.6% below the prior year quarter, comfortably within the lower half of the guidance range [12] - Earnings per share (EPS) came in below the low end of guidance primarily due to a $4.8 million pretax charge related to a supply chain fraud matter and elevated insurance and claims costs [12][13] - Gross profit was $98.3 million in Q1 2025 compared to $113.9 million in Q1 2024, with a gross profit margin of 8.5% [28] - Variable contribution margin was 14% of revenue in Q1 2025 compared to 14.4% in the same period last year [29] Business Line Data and Key Metrics Changes - Heavy haul revenue increased by approximately $113 million in Q1 2025, a 6% increase year-over-year, driven by a 3% increase in heavy haul revenue per load and volume [10][24] - Non-truck transportation service revenue in Q1 2025 was 8% or $6 million above Q1 2024, primarily due to a 14% increase in ocean revenue per shipment [24] - Transportation Logistics segment revenue was down 1% year-over-year on a 1% decrease in loadings, while revenue per load was approximately flat compared to Q1 2024 [25] Market Data and Key Metrics Changes - U.S.-Mexico cross-border revenue was approximately 11% of consolidated revenue during the 2024 fiscal year, while U.S.-Canada cross-border revenue was approximately 4% [8] - The freight environment in Q1 2025 was characterized by soft demand, weather impacts, and readily available truck capacity [11] - The number of loads hauled via truck in April 2025 was approximately 2% below April 2024, while revenue per load in April was approximately 1% above April 2024 [35] Company Strategy and Development Direction - The company continues to focus on accelerating its business model and executing on strategic growth initiatives despite macroeconomic challenges [9] - Investments in technology solutions and fleet refreshing are ongoing to benefit the network of independent business owners [15] - The company is committed to continuous improvement in safety, service, and support for customers, agents, and carriers [10] Management's Comments on Operating Environment and Future Outlook - Management noted that the freight transportation backdrop is highly fluid amid political and macroeconomic uncertainty, impacting trade and tariffs [6][34] - The company expects below-normal sequential movements in loads from April to May, with specific weaknesses noted in the automotive sector due to tariff impacts [85] - Management indicated that while the supply chain fraud matter has been addressed, the company does not expect significant additional charges in Q2 2025 [36] Other Important Information - The company deployed approximately $61 million of capital toward buybacks and repurchased approximately 386,000 shares during Q1 2025 [15] - The effective income tax rate was 24.7% in Q1 2025 compared to 23.5% in Q1 2024 [32] - The company ended the quarter with cash and short-term investments of $473 million [33] Q&A Session Summary Question: Can you elaborate on the insurance developments and expected future trends? - Management indicated that the year-over-year difference in prior year development was significant, with about $11 million unfavorable development in Q1 2025, primarily from cargo programs [41][42] - The normal run rate for insurance and claims is just below 5% of BCO revenue, but the current environment suggests this may be low [48] Question: What are the trends in heavy haul and which end markets are performing well? - Heavy haul has been a bright spot, with growth across machinery, electrical, building products, and the energy industry [58] Question: How will the new English proficiency requirements for CDL operators impact the driver supply market? - Management does not expect an impact on the BCO fleet due to high qualification standards, but it may affect overall industry capacity positively [61] Question: What is the current state of capacity in the market? - Management noted an uptick in third-party capacity but expects this to decrease as they become more selective with carriers [72] Question: Can you provide insights on the near-term outlook and areas of strength or weakness? - Management highlighted that automotive and U.S.-Mexico cross-border business were weak, while heavy haul and platform business showed strength [87]