Excuse me, everyone, we now have our presenters in conference. [Operator Instructions] I would like to now turn the conference over to Mr. Richard Cribbs. .

Thanks, Stephanie. Good morning. Welcome to our first quarter conference call. Joining me on the call this morning are David Parker and Joey Hogan..

As a reminder, this conference call will contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated by the forward-looking statements.

Please review our disclosures and filings with the SEC, including, without limitation, the Risk Factors section in our most recent Form 10-K. We undertake no obligation to update or revise any forward-looking statements to reflect subsequent events or circumstances.

A copy of our prepared comments and additional financial information is available on our website at covenanttransport.com under the Investors tab. Our prepared comments will be brief, and then we will open up the call for questions..

our Truckload segment's revenue, excluding fuel, increased 13.7% to $149.4 million due primarily to a 560 or 21.9% average truck increase, partially offset by 6.7% decrease in average freight revenue per truck in the 2019 period as compared to the 2018 period.

Of the 560 increased average trucks, 435 average trucks were contributed by the Landair acquisition as Landair contributed $20 million of freight revenue to combined truckload operation in the first quarter of 2019..

Versus the year ago period, average freight revenue per total mile was up $0.116 per mile or 6.6%, and our average mile per tractor were down 12.5%. Truckload rates were impacted favorably and utilization was impacted unfavorably by the impact of the Landair operations on the combined Truckload segment.

Landair's shorter average length of haul and dedicated contract solo-driven truck operations generally produce higher revenue per total mile and fewer miles per tractor than our truckload business units -- our other truckload business unit..

Versus the prior year quarter, freight revenue per tractor at our Covenant Transport subsidiary experienced a decrease of 8%. Our SRT subsidiary experienced a decrease of 1.5%, and our Star Transportation subsidiary experienced a decrease of 0.7%..

The Truckload segment operating cost per mile, net of surcharge revenue, were up approximately $0.172 per mile compared to the year ago period. This was mainly attributable to higher employee wages, casualty insurance claims costs and the impact of the Landair truckload operations' higher cost per mile model.

These increases were partially offset by lower net fuel costs and net depreciation expense as we recognized a gain on disposal equipment totaling $100,000 in the first quarter of 2019 versus a loss of $1.1 million in the first quarter of 2018..

The Truckload segment's adjusted operating ratio was 98.8% in the first quarter of 2019, compared with 95.9% in the first quarter of 2018..

Our Managed Freight segment's revenue, excluding fuel, increased to 143.7% versus the year ago quarter to $46.4 million from $19 million. Of the $27.4 million of increased revenue, Landair contributed $20.2 million of revenue to the Managed Freight operations in the first quarter of 2019..

The Managed Freight segment's adjusted OR was 90.4% in the first quarter of 2019, compared with 94.4% in the first quarter of 2018. The result was an increase of Managed Freight adjusted operating income contribution to $4.4 million in the current year quarter from only $1.1 million in the prior year quarter..

Our minority investment in Transport Enterprise Leasing contributed $3 million to pretax earnings or $0.12 per diluted share in the first quarter of 2019, compared with a $1.5 million contribution to pretax earnings or $0.06 per diluted share in the prior year quarter..

The average age of our tractor fleet continues to be young at 2.3 years as of the end of the quarter, slightly up from 2.1 years a year ago. Since December 31, 2018, total indebtedness net of cash and including operating lease liabilities has increased by approximately $24.4 million to $279 million.

At March 31, 2019, our stockholders' equity was $347.7 million for a ratio of a net indebtedness to total capitalization of 44.5% compared to 42.6% ratio as of December 31, 2018. In addition, our leverage ratio has increased to 1.7x as of March 31, 2019, from 1.5x as of December 31, 2018..

One, improvement in the operating income and operating margin at our Managed Freight segment, including successful integration of Landair's warehousing and transportation management service offerings. Two, included with that, the organic growth of our freight brokerage service offering as compared to the first quarter of 2018.

And three, improved year-over-year earnings contributed from our investment in Transport Enterprise Leasing..

One, the operating margin decline of our expedited and solo refrigerated service offerings. Two, an approximate 6.1% decrease in average freight revenue per truck for our Truckload segment, excluding Landair's truckload operations, versus the first quarter of 2018.

Three, increased truckload operating cost on a per mile basis, most notably, the unfavorable employee wages and casualty insurance claims costs, partially offset by improved net depreciation expense.

And four, the $24.4 million quarterly increase in our total net indebtedness primarily related to the growth of receivables purchased by our factoring division during the first quarter of 2019..

Our fleet experienced a decrease to 3,103 trucks by the end of March, a 51-truck decrease from our reported fleet size of 3,154 trucks at the end of December. This decrease was primarily driven by a reduction of trucks from our solo-driven one-way fleets.

This was partially offset by a 24-truck increase to 1,677 dedicated fleet trucks at March 31, 2019..

We intend to continue executing our strategic plan of becoming increasingly embedded in our customer supply chains by growing our Managed Freight segment and the portions of our Truckload segment with more predictable long-term contracts..

Based on the current freight market and normal seasonal patterns, we expect second quarter 2019 adjusted EPS to be fairly consistent with the prior year quarter based on the favorable impact of earnings contribution from Landair's service offering, partially offset by the unfavorable impact of the slower freight market in general..

Thank you for your time. We will now open up the call for any questions. .

[Operator Instructions] Our first question comes from Scott Group with Wolfe Research. .

So David, you had a comment in the press release about sort of better activity so far in April. I guess it's a little different than what we've heard from some of the others, so maybe if you can add some color there. .

I would say that what I really miss about that, Scott, is the weather is mostly over with -- probably 95% over with, even though I thought the snow projections up in the northern plains areas in the next couple of days, but that said, most of that is over with, so it is definitely freeing up some of the equipment that we had there in -- horribly there in the month of February and somewhat there in the month of March.

So it's more of that is that the trucks are starting to have some freedom to be able to move and we're able to generate some more freight on those trucks. It's not that I admit certainly I've seen any dramatic increase. I mean, it's not horrible. It's just not -- there's nothing to write home about it.

Just we're having to work awfully hard to make sure that we move these trucks every day. .

To add some color. Scott, noted that it still remains well below the level we experienced in 2018, it's just picked up some. And versus a low base in the first quarter, we should see pretty good sequential miles per truck improvement in the second quarter. .

And how would you compare it over some normal April?.

I would say that, takeaway 2018 and it is equal to down over the last few years, equal to down takeaway 2018. .

Okay.

If I look at the rate per mile up 7%, can you give -- what do you think the underlying rate per mile is excluding Landair?.

That's on loaded mile without Landair, that was closer to up about 4%, a little over 4%. So that's got mix issues with improved contract rate, but offset by the lower dedicated average cost or rate per mile. .

Okay.

And maybe can you guys just share what you're seeing from a contract repricing standpoint? And maybe how we should think about rate per mile trending as the year goes on?.

We're kind of -- we believe that as the year progresses that we're going to -- we're basically going to see in our minds in that 2.5% to 5% kind of numbers on rate increases.

And we are through a lot of our -- we have a lot of our big customers that come due in the month of -- in the second quarter, during the course of the second quarter, and we've negotiated some of those already.

And I'm pleasantly surprised that -- I'm pretty happy with what we have seen, one that we had to take some reduction zone, but we were able to get a lot of lanes at higher rate of new business. So if I was to average all of those together, then I'm very satisfied with what we ended up with.

Other than that, the lanes that we do with our customers, our existing customers, we have seen in that 4% to 5% increase number to give you an idea. .

And Scott, I think the way that might turn out looking from a consolidated financial perspective is I think you'll see the rates be kind of even-ish with first quarter and then move up a bit from there, call it 2% to 3% in the third quarter and then again fourth quarter is peak, and so who knows what that will end up looking like at this point, but the underlying piece of that would still be kind of equal to the Q3 numbers, the normal moving freight.

And keep in mind, a lot of that is based on -- and we were talking on contract rate increases, talking about one-way freight, which continues to decrease in percentage of our overall business. .

Yes. As dedicated has exploded, we've been really growing in that area, that's exactly correct, Richard. .

Excellent. And then, Richard just one quick one for you. You noted the leverage starting to move a little higher.

You're planning to pay down some debt and then sort of get that going in the right direction again?.

Yes. We had kind of a heavy piece of our annual capital expenses in the first quarter at about $33.5 million. I expect that number to be more in the teens and 20s for the rest of the year each quarter, so kind of finishing the year somewhere between $85 million and $95 million of net CapEx. It was a heavy CapEx quarter.

We've got more disposals in the second quarter than we did in the first quarter. So that should help as well as we kind of had a timing event on purchasing some receivables for our new client on the factoring side, the accrued receivables and the debt a little higher than -- 3 days later, it was $10 million less.

So I do expect to continue to kind of pay down debt from here for the rest of the year. .

Can you just explain what you're doing with the factoring?.

Yes. I think -- Scott, this is Joey. We started factoring business in 2011, and the strategy for that was to offer complementary products similar to our leasing business and targeted with our third-party carriers to help us grow our brokerage business, so that was the strategy.

And so it's actually in and out of itself become a business that's becoming quite large as far as a factoring operation and so -- certainly we have our leasing business, we have our factoring business. We don't have an investment, but we have a relationship with an insurance service.

So when carriers work with us, we tend to offer [indiscernible] products. We have a menu of services to try to ingrain that carrier with us on an ongoing basis. So that was the strategy. It's growing quite nicely.

Historically, it's been reported as part of our Covenant Solutions' company because that is the legal entity that owns that operation and -- but we do run it separate. It's getting quite large.

We're probably buying -- we're getting close to $700 million of purchase receivables on an annualized basis inside that operation, and so its growth here over the last 2 years has actually been quite phenomenal. Its return on invested capital is pretty good. It's much less volatile than the, let's call it, the truckload side of the space.

We're pleased with its margins as far as return on invested capital in that high single-digit range. And through the 15, 16 period of time, if you kind of think through what happens in a [ softer ] freight period of time, it continue to grow through that period of time quite nicely.

Obviously, credit's important, making good credit decisions, I think, and reports up to Richard, our CFO. We did that on purpose make sure we had good controls on credit decisions around what we're investing in, and it's really gone quite nicely.

And the penetration, really if you look at where we are 8 years later, it's really becoming more of a complement in our leasing, and our factoring business is really more partnering together.

There is some help on the carrier side, but really our leasing and our factoring business do good job working together and a lot of common customers between those 2 businesses. .

Our next question comes from Brad Delco with Stephens. .

I wanted to ask a little bit about kind of the assets and how you're thinking about deploying them. We're kind of back to balanced or more balanced freight environment. You guys have been very successful with your team operations, but I think that probably provided some challenges in the first quarter to get utilization on those trucks.

Are you intentionally trying to move those trucks into dedicated? Or how can you manage your large team with the challenging environment we're in right now?.

Yes. Brad, our goal -- first of all, you're right. As we all know, the team side of the business always in the first quarter can be a difficult environment, depending upon what the weather does, and this year was a -- is a bad weather event.

So it definitely hurts that side, especially gets a tough comp with last year with ELD issues going on and those things that really helped that. [ They’ll ] not be as big of an issue in the first quarter..

But that said, what our team's done is a very great profitable, good, wonderful piece of business that the vast majority of our competitors would love to have the kind of team side of business that we have got out there. But our goal is to grow -- continue to grow around it, so it takes out the volatility.

And we're not happy with what happened on the Expedited side in the first quarter again for the weather, but the rest of our companies, if you look at what we've been saying for the last 2 or 3 years, getting closer to the supply chain and getting deeper in the supply chain and growing the brokerage side and the leasing side and the contract logistics side, we can see that it's taken out some of those earnings volatility out of the business.

But that said, our goal is to continue to offer the Expedited side of it. And as we grow the dedicated side, it's predominately coming, as we speak, from the OTR solo operations that both Covenant and SRT have. And so that's the first place. Do we have dedicated teams out there running? Yes, we do.

Probably out of 1,700 that are out there running, there's 40 or 50 teams that are running in the dedicated environment, the rest on OTR solos. .

Okay. And then when I think about who your customers are for that Expedited, I mean, I remember you guys being pretty closely aligned with a large e-commerce player that did a lot of 2-day shipping. Now they're doing, apparently as of yesterday, 1-day shipping.

Are you realigning with large e-commerce players for a move like that? Or are you realigning yourself with other types of customers for that Expedited product?.

Yes. We are doing both of those. We are -- our heritage on that piece of business is, as you're aware, is virtually every LTL company in the United States, every airfreight company -- not all of them, but I'd say 90% of them that we do business with and those of our customers only decided if needing to expedite it.

So therefore, we're definitely involved in all of the e-commerce freight. We're not doing as much with the folks up in Seattle. But they're still there, and we still do business with. We have found better -- that they fit that work within that piece of business.

But we're with every airfreight, every LTL company that there is, which we understand still moves with that company, yes. .

Okay. And then finally, in terms of your guidance parameters for 2Q, for earnings to be similar. Any way you can kind of give us the puts and takes of that? I mean, you kind of have Landair sort of fully embedded, we probably would have expected to see some more earnings growth.

So what really is offsetting it other than just the more balanced freight environment?.

Definitely, I think that's it, Brad. I think you're going to have -- this Managed Freight side is going to continue to show stronger results, including the piece that's Landair.

And then Landair dedicated and Star dedicated continuing to do -- going to perform consistently as well as Covenant SRT dedicated improved a little bit up in the first quarter and then the one-way freight market being what it is kind of being down versus last year, I think that -- then Transport Enterprise Leasing for example, they're probably closer to $2.5 million per quarter of income to us going forward versus the $3 million in the first quarter, may have some benefit from some gains on sale, have some used equipment that wasn't really good condition kind of thing.

So they're probably going to be down a little bit versus first quarter. I think that basically takes care of it.

We've got -- we had some fee costs in the first -- sorry, in January that were carried forward from kind of fourth quarter into first quarter, and so I think we're going to see our operating cost per mile down a little bit as well overall, and so a little better operating margin versus the first quarter on the trucking side. .

Our next question comes from Jason Seidl with Cowen. .

Wanted to sort of look at your mix of businesses as you were saying you want to get more into that managed transportation, and sort of what percent of that is your -- is part of your business now? And where do you think you can get it as a percentage of your business mix going forward? And how we think on your reported revenue per loaded mile as that mix changes over time?.

Jason, you cut out there in that last part of your last question.

Could you repeat that?.

Oh, sorry, yes.

How do we think about those changes as you go to the more dedicated side of the business on your revenue per loaded mile over time?.

Yes. Think about the way that we are looking at our business there's -- the way that we're starting to move our internal discussion around, but this just it's – [ provide ] some color is the contract logistics space is comprised of dedicated. Let me just use that for example. Dedicated, which I think I have answered some of your questions.

Dedicated warehousing, freight management and our factoring business. And if you think -- and then what's in the transportation services, is our Expedited, refrigerated and brokerage operations..

And so if you look at where that was last year in the first quarter, 22% of our revenue was in contract logistics, 78% in transportation services. Correct way to think about it is the one-way business plus brokerage is transportation services. In the first quarter of this year, 46% contract logistics and 54% transportation services.

So the difference in that is -- so that's kind of one piece. So it's more the business kind of -- maybe call it, it kind of moves further down the supply chain and contract logistics piece, obviously, continues to grow. We've got pedal down in there.

We've got strategic initiative continuing to grow dedicated, warehousing and freight management spend, our factoring, we'll continue to grow that. And so the one-way side not so interested to grow except for the brokerage piece of the pie. And why? Well, it's more volatile, but rather challenge is there.

Getting the people, the team together, just a lot of systemic industry issues there that are going to impede growth. And so that's -- as you look at that, that's obviously the strategy.

So the impact of the rates on the dedicated side, given size, we're even having some pretty large differences in pricing inside of that 1,700 trucks sitting inside of dedicated.

A wide range of high-utilization customers, lower rate structure type of customers, and then you've got some what we call is high rate, lot of waiting time and capacity available to move the freight. So there's a lot of severity, the length of hauls are significantly different in there.

And so it's not a -- what 2, 3 years ago, we had a more clearer answer. But generally speaking, dedicated pricing overall is less than the one-way side. So as we continue to grow that, comparables to a year ago continued to get pressured in that space with comparable lower cost. .

That did give us a still nice operating ratio on that. .

So yes, we did. As we look back in the first quarter on our dedicated trucks, our automotive business did well relatively speaking. Our new, let's call it, Landair culture, let's call it, contract logistics product did really well. However, our dedicated businesses inside of transport SRT struggled in the first quarter.

And there are several things in that, that we're working on diligently as far as management of those suites, but probably didn't perform to our expectation in freight and so we're working hard with those to get it closer to the other 2 offices, and we're making a lot of progress with that.

So I think that's going to be a plus that Richard didn't talk about earlier with Brad or [indiscernible] as far as some sequential improvements, I believe those fleets -- those 900 trucks and those fleets will do much better in the second quarter than in the first quarter..

But it's a big mix issue even inside of dedicated until it stabilizes, but here's the thing is that it's going to continue to grow, and we're overall very comfortable because we know it's a wonderful complementary product to our one-way fleets from a driver standpoint and driver options and choices.

One-way fleet is very complementary to the dedicated fleet. It comes to fill in capacity and storage capacity with dedicated accounts if they need that. And so it's a nice mix of the 2. And so right now, the way that we're thinking about it, our dedicated fleet is about 1,700. Our one-way fleet is about 1,300, if you will.

And we expect that dedicated size continue to grow. It had a huge amount of growth last year. I think it's going to continue to grow, but the rate of growth was slow and the one-way fleet has been declining and it will continue to decline, but slower. I think we were suppose to pick numbers.

I could see the one-way fleet being 1,100 or so by the end of the year, dedicated closer to 2,000 trucks or so by the end of the year, so I think it will sell off. .

Okay. That's great color. I'll turn my last question here back to David and give somebody else the chance. But David, you kind of mentioned that April as compared to normal April is flat to maybe modestly down a bit.

Is that the same for both your main trucking division so your regular drive in and SRT? Was there any differentiation?.

Yes. Now it is the same. It's really the overall on the outside [indiscernible] and even on the refrigerated side of the business that we have seen also there in January -- I mean, there in February and March, that is -- those were ones that kind of went hand in hand with the drive side.

I was talking to a large -- I was talking to one of our large customers on a particular week that their business was down. During the wintertime, during the month of January -- excuse me, during the month of February, they were down about 1,000 loads a week off of a base -- of a large base.

I can't answer that question on how big the base really was, but I just found it surprising that they were down. And so because you think about the food side of it, but at the end of the day, there in February and March, people just weren't getting out.

And if it wasn't a vortex going on, it was starting into the rain and driving to Tennessee and people just were not getting out to dine or to do and I guess, we were at home, we end up eating potato chips instead of steaks, I don't know. But at the end of the day, we had -- even our food shippers were not shipping as well..

But that said, we're starting to see some last -- as we speak, we are starting -- but this is the 25th or so of April, we're starting to see some life on the food, why? Because the beverage season is in the process of beginning, produce is about –- [ I’m seeing ] Florida, as it's now started to -- started to move out of Florida.

So the Southeast has started to tighten up as we speak. And so we got about 2.5 more months of that produce in the South. I'm starting to see the West Coast produce that is starting up, crank up a little bit. We're probably about 3 weeks away, and then we'll take it to September.

So the beverage, I'm starting to see the grails in the South, but it's starting to cook out. We're starting to see some movement. And so we got 1 food company next week that we won about $5 million of brand-new business that starts next week, and I'm starting to see some movement on that side.

So it's one of the reasons why we were saying that as we speak of the 25th of April, but April is flat to down a little bit, excluding 2018, but I do feel that there's expectation that we will start rising off the base and start getting better as the year progresses. .

[Operator Instructions] Our next question comes from Kevin Sterling with Seaport Global. .

What are some of the initiatives you're undertaking to drive down the insurance cost? I know weather did not help you in Q1 obviously, but was there anything else unusual that may have led to an elevated rate?.

Great question.We've been putting a lot of effort into that, Kevin. We're continuing to add some technology on the trucks that haven't been there before, that we're bringing into automatics. For example, we were at approximately 2/3 of our fleet equipped with automatics through the end of March.

That expectation is to be about 90% to 95% by the end of this year, 100% at some of the fleets. And so we think that's the benefit. But included with that comes front collision mitigation, lane departure and those kind of things. It will have the full suite of products available on those trucks, and we're seeing really good numbers from that..

Interestingly, our view of the asking rates has continued to be pretty good, and we really finished the last quarter really strong. The month of March was actually really aggressive, and we were excited about the little number of actions that we had.

And coming off a pretty tough start in January or February, probably like you said, could be a lot of weather-related issues there. But we're also spending time on some behavior issues and then looking at our hiring practices and those kind of things. So I think that we're going to see that number improve some versus the last 3 quarters.

It's slightly improved from Q3 to Q4 and from Q4 to Q1. But I think we did have some room to go there. I do expect to get back down to numbers that are far from $0.14 a mile as we move forward. .

Yes. Your question there, Kevin, exact same question that we're seeing because we did a lot of things that we've been doing for the last couple of years that have been helping and assisting from a safety standpoint.

And we think some results from the accidents we did have, I would say, in the last 3, 4 months that we've had some claims that grew better than what we expected them to grow that had some effect on that, but we don't believe that we should be at a $0.14 a mile insurance cost, and we're trying to make sure that we do everything in our power to get that -- the call side.

And at the same time, it's interesting that we can have better deals, the accidents that are lower. And we're also seeing a higher cost that when you do have an accident, we are seeing higher cost of that. I mean it's like we broke somebody's leg and it's $150,000.

I mean, it's those kind of things that are just creeping up on things that used to -- used to cost you up $20,000 and $30,000 and $40,000, $50,000 are now costing up $100,000. So that's one of the aspects that I'm seeing as we go through each and every one of the claims. .

Yes.

Is this -- the higher cost of claims, is that just the new reality we live in these days, you think?.

There is some inflation there. And you're seeing the same thing in the medical insurance side. If you think about that, those things carried through into the cash and the insurance side.

When you have accidents that involve third parties and there's cost related to that, as you're seeing medical costs rise, you're going to see similar inflation cost on the casualty and worker's comp side. That's really where that is. It's -- I don't think it's much more than that. .

Yes. Our incident rate, to Richard's point, the first quarter, it was down actually on DOT accidents by 13% versus first quarter of last year. March was an incredible month as well as extremely helpful as we closed the quarter with loss severity or accidents with third parties was almost double what we had last year.

So I would kind of point it to more of a severity question. Now last year was one of the lowest we've had in access with third parties in a long, long time, and this year was a pretty rough quarter.

So I can't point it -- the way I look at it, Kevin, is just that if the overall incident rate is continuing to move in a good direction here and a good plan. Unfortunately, I understood there's going to be some severity at times.

And -- but the overall rate being down quite nicely in the first quarter versus last year gives me comfort that we're on the right track. And severity one, that's obviously, you've got to watch that, but that's where all the things Richard mentioned earlier comes into play at helms.

And all our trucks have basically gross stability, collision avoidance and lane departure.

The automatic question is one that we still have some thoughts, studies around as we continue to kind of grow that and get it cushioned to 100%, there'll be some comp there too, but we had a pretty tough incident -- I mean, severity rate in the first quarter, [indiscernible].

Okay. Let me pivot here if you don't mind and maybe ask about M&A opportunities.

Are you seeing a few more opportunities these days that's maybe secondary values of equipment soften a little bit? Some of the smaller operators see last year's generational year and kind of look to exit business or maybe call the spot market, for instance, okay, let me get out while the going is still good.

So maybe talk a little bit about, if you don't mind, your M&A pipeline, are you seeing a few more opportunities today?.

Kevin, there is. Since we did the Landair acquisition last July, our goal has just been successfully to integrate that into the system, and so there is no doubt just when the thing that come across our debt that if we paid any attention to it, it could get heavy.

I mean, but yes, everything you just said there is that you're definitely seeing carriers that having interest in selling and still trying to get down to 2018 results and -- but we have not entertained those and so until we get -- feel comfortable the Landair side of it.

And then at that case, we're much more interested in a Landair type of acquisition than we are just somebody that has OTR trucks. .

Got you. And then last question here is once again, I'd love to get your thoughts on this divergence we're seeing in the contract market versus the spot market and maybe share some conversations or general conversations you have with shippers. It sounds like you're pleasantly surprised at contract market relative to the spot market.

And so some of the conversations you're having are shippers coming to you just locking in a contract and forgetting about it for the rest of the year? Or do you sense some shippers may be holding back some freight to put in the spot market? Or shippers, I think, just scarred from last year and still hasn't pull a lot of freight in the spot market.

So I'm just curious, you're starting to have -- shippers maybe hold back a little freight to take advantage of the spot market weakness? Or they just scared to death after what happened to them last year?.

I would say you had about 4 bullet points, and they're all correct. And because you do, you have all of the above.

And I would say as a whole, our relationship customers that we have are ones that are negotiating rate increases that realize it's not 2018 and they're not expecting rates to go up like 2018, but they are -- do believe that there's another 2018 somewhere down the road and that they don't need to be shortsighted in those decisions, and then they're being fair with us, being fair with the carrier and so we have a whole slew of our top accounts that are predominantly that way.

We then have shippers that are saying I got hurt so bad last year in the market that I'm not going to use the spot market anymore and -- but we've got to be -- I'm not expecting any type of rate increases. So we got that set of shippers.

And then the third one is that you got the ones that are saying, I've got to take advantage somewhat of the spot market because it's down so dramatic, it hurt me last year that I got to make up some this year, and it's really, it's almost like every meeting that you go to, you've got to figure out where they are at because I'm here to tell you the transportation department of these companies are getting pressures from [indiscernible] above.

I mean they are getting pressure and sometimes they are just being shortsighted. I talked to a large -- one of our large customers just in the last week or so, and he had to go report to his upper management. And what he said is that he said, write there down, right now, rates will be going back up.

Why? Because none of us can have enough truck drivers. And until that 1 bill, once the truck driver situation is straightened out, there is going to be rate increase that might be opposed when you have a economic environment that pauses for a little bit.

There might be a pause in the rate increases, but then the rate increases are going to start again all of the name of drivers.

And so at the end of the day, we may be going to a spell here for 1 or 2 quarters that the trucking industry is having to go through, but long term, the driver situation is still there and rates for drivers are going to have to go up and therefore rates for our customers have got to go up. .

[Operator Instructions] There is no additional questions at this time. .

All right. We'll wrap the call up there. Thank you, everybody, for you concern with us and spending the time with us, and we'll talk to you again next quarter. .

Thank you, ladies and gentlemen. This concludes the presentation. You may now disconnect..