Financial Data and Key Metrics Changes - For Q4 2025, revenue decreased by 2% year-over-year, while operating income improved by 19% and diluted earnings per share increased by 24% compared to the prior year period [10] - For the fiscal year 2025, revenue declined by 1%, while operating income increased by 4% [11] - The company executed over $25 million in tracked savings in Q4, achieving a run rate of over $100 million in annualized cost savings [13] Business Line Data and Key Metrics Changes - The final mile business experienced soft market demand, particularly in furniture, exercise equipment, and appliances, while fulfillment business saw positive demand driven by off-price retail channels [20] - The dedicated business maintained flat operating income compared to 2024 results despite a lower fleet count, with strong new truck sales in Q4 [26] - Intermodal service volumes were down 2% year-over-year, with transcontinental volumes down 6% in the quarter, while eastern loads were up 5% [33] Market Data and Key Metrics Changes - Demand in Q4 aligned with expectations, with a tightening market observed around Thanksgiving continuing through year-end [15] - Customers view recent market tightening as temporary or seasonal rather than a structural shift, with many consolidating logistics providers [17] - The freight market is described as fragile, with limited elasticity in supply, indicating that small increases in demand could create significant market changes [40] Company Strategy and Development Direction - The company is focused on disciplined growth through operational excellence and leveraging investments in people, technology, and capacity [7][8] - A commitment to repairing margins to drive long-term value for shareholders is emphasized, with a focus on maintaining operational excellence [9] - The company is actively pursuing opportunities to convert highway truckload shipments to intermodal, positioning itself as a primary participant in intermodal discussions [32] Management's Comments on Operating Environment and Future Outlook - Management acknowledges ongoing inflationary cost pressures but highlights successful cost management and operational efficiencies [11] - The company enters 2026 with solid momentum operationally and financially, with a focus on maintaining a disciplined approach to growth [14] - Management expresses cautious optimism regarding market conditions, emphasizing the need for continued customer engagement and feedback [53] Other Important Information - The company spent $575 million on capital reinvestment in 2025 and executed a record $923 million in share repurchases [11][12] - The balance sheet remains healthy, with leverage just under the target of one times trailing 12-month EBITDA [12] Q&A Session All Questions and Answers Question: Can you elaborate on what you mean by the freight market being fragile? - Management indicates that the supply side has not changed significantly since Thanksgiving, and small increases in demand could create larger ripples in the market due to limited elasticity [39][40] Question: What is the opportunity for cost savings in 2026? - Management expresses confidence in exceeding the $100 million target for cost savings, citing successful execution of various cost initiatives [46] Question: How does the recent tighter capacity freight market impact expectations for dedicated sales? - Management acknowledges that while it is too early to see significant changes, there is optimism due to strong new customer acquisitions and a robust sales pipeline [69]

Financial Data and Key Metrics Changes - Revenue was roughly flat year over year, while operating income improved by 8% and diluted earnings per share improved by 18% compared to the prior year period [10][11] - Despite inflation in insurance, wages, employee benefits, and equipment costs, productivity and cost management efforts offset these headwinds [10][11] Business Line Data and Key Metrics Changes - Intermodal volumes declined by 1% year over year, but the company outperformed the broader truckload market decline due to customers converting freight to intermodal [15][32] - The final mile business faced challenges with soft demand for furniture, exercise equipment, and appliances, but positive demand was noted in the fulfillment network driven by off-price retail [20][21] - Integrated Capacity Solutions (ICS) saw modest sequential improvement in volumes, with rates up low to mid-single digits and winning volume with new customers [22] Market Data and Key Metrics Changes - Overall demand trended below normal seasonality for much of the quarter, with truckload capacity continuing to exit the market [14] - Truckload spot rates remained under pressure throughout the quarter, but recent regulatory developments are impacting capacity [14][66] Company Strategy and Development Direction - The company is focused on operational excellence, scaling investments, and repairing margins to drive stronger financial performance [5][6] - A significant emphasis is placed on lowering the cost to serve, with a goal of removing $100 million in structural costs from the business [12][13] - The company aims to leverage its reputation for service excellence to drive strategic growth and maximize returns on investments [6][8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to adapt to rail consolidation and emphasized the importance of long-term agreements with major rail providers [7][31] - The company expects to continue generating significant cash flow and remains focused on strong returns with deployed capital [12][13] - Management acknowledged the challenges in the current market but remains optimistic about future growth opportunities [10][34] Other Important Information - The company has made progress in its initiative to lower costs, having eliminated over $20 million in the quarter [12] - The company is leveraging technology and automation to improve operational efficiency and customer satisfaction [81][84] Q&A Session Questions and Answers Question: Can you provide details on the $20 million cost savings and how it played out by segment? - Management indicated progress across all areas of the business, with improvements in efficiency and productivity noted in intermodal and dedicated services [37] Question: What is the outlook for pricing and how does it relate to the cost savings initiative? - Management clarified that while the rate environment has been challenging, the cost savings initiative is expected to enhance performance durability when the market improves [44][46] Question: How do you expect loads and volumes to trend in the upcoming quarter? - Management noted that while the ocean peak season may have ended, domestic demand is expected to remain strong as customers prepare for the holiday season [75]