Please be aware that each of your line is in a listen-only mode. At the conclusion of today's presentation, we will open the floor for questions. At this time, I would now like to turn the conference over to Joey Hogan. Please go ahead sir..

Thank you. Welcome to the Covenant Logistics Group First Quarter Conference Call. As a reminder for everyone, this 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, and actual results could differ materially from those contemplated in the forward-looking statements..

We'll take our first question. Caller your line is live, please state your name..

Hey guys. This is Jason Seidl from Cowen.

How are you this morning?.

Hey, Jason. Good morning..

Hey Jason..

I want to concentrate a little bit on the obvious here, the Dedicated segment that seems to be where you guys sort of have the most upside, you alluded to some changes that were that were made and then some improved numbers in March.

You told us directionally where you think profitability is going in 2Q; can you guys turn to profit? And then also if you could expand upon some of the let's say problem child that you might have among your customer base and what to be done about that?.

Hey, Jason, this is Paul.

How you doing this morning?.

Good sir.

Yourself?.

Doing well, doing well. So, it's kind of looking back at the first quarter, one thing, don't underestimate the effect of whether in March -- sorry February. It had a really negative effect, hence the significant improvement in March. And some of the rate increases had started.

We've got a couple -- we've said it before about half that business runs at acceptable margins and is really good long-term dedicated business and about half of it right now is I would call kind of commoditized dedicated and its business that we're -- with the way the driver market is soaring up, we're going to have to get improved pricing.

A large number of those contracts have rate increases count in the June, July timeframe. So, I think you're going to see some incremental improvement, I'll call it maybe get into the black in the second quarter, but you're not going to see it anywhere where we expect it to be long-term.

In the third quarter, it should be better than the second quarter and then we're going to continue that kind of wait and fade momentum. And where -- here's where people want to partner with us and pay for the service that they're getting, we're going to keep moving with them.

But we're going to have some help from customers, especially as dynamic as this driver market is. So, I hope that helps you..

No, it does Paul.

And when we look at the half of the business that you would consider sort of good long-term dedicated contracts, what sort of OR would you put upon that half?.

Yes, probably low 90..

Low 90s. Okay.

And in terms of the driver market, what should we expect from pay? I mean are there more pay increases coming down the road here?.

I would say we're taking kind of a wait and see approach on the Expedited side. And a lot of that is going to be dictated by what happens with our competitors and with the solo market.

Our expedited pay increase was received really well, not just in terms of the pay increase, but the miles we're going to put on the trucks, the W-2 wages of those drivers are really good numbers. On the Dedicated side, I would say it's in pockets, but way more accounts are going to have to be adjusted upwards than not.

And so we've done an analysis this week, and we've got a number of -- several -- here's what I tell you, there's a correlation between the accounts that what we're calling in the green for driver pay, which is 75% or better, kind of, quartile for driver pay. Those accounts are doing pretty good from a returns perspective.

The ones that are in the red, where we're bottom 30% of pay, those are accounts we're not making a lot of money on right now. And so we're going to -- we got to move driver pay to steady the fleet and not be filling in with a bunch of expensive fill-in drivers. And that's what's going to help us get to profitability back.

But -- so overall, yes, Dedicated is going to have to have tariff rate increases. It's just how much depends on -- it's very location specific right now..

Yes, that makes sense. On the last question on the Logistic segment, obviously, just -- an excellent quarter for you guys.

Can you talk a little bit about how we should look at that growth was moved throughout the year?.

If the market stays as hot as it is today, I think you're going to see similar returns. I think what happens to Managed Freight is going to be dependent on how long you think we stay in this cycle is. As we've said before, that segment, a large percentage of that is where we play in the spot market.

And so you're seeing a lot of spot rates in there and a lot of spot freight and pop up type freight among a number of customers. And there are a lot of customers that are expedited that we have Expedited and Dedicated business with.

And so how that business goes for the rest of the year is going to be dependent on how hot the overall freight market maintains. I mean if Q4 is like Q1, you'll probably see a similar number. If things were to trail off, you're going to start see the volume in that division going down and the margin going up a little bit..

That makes sense. I'll turn it over to somebody else. Gentlemen, I appreciate the time as always. Be safe out there..

Thanks Jason..

Thanks Jason..

Thank you. And we'll take our next question. Caller your line is live, please state your name..

Hey, great. Good morning everybody. It's Jack Atkins from Stephens. Thank you for taking my questions..

Hey Jack..

Hi Jack..

So, I guess, let me start just on -- Paul, if I could just kind of dovetail to one of your last points there in terms of just sort of how you think that the next kind of several quarters play out from a cycle perspective, because given what we're hearing out there in terms of difficulty finding drivers, it certainly feels like we're in for an elongated cycle this time.

So, I don't know who wants to take the question. But maybe David, I'd love to get your perspective just given your tenure in the industry and all you've seen.

Just on sort of where you think we go from here, both from a rates perspective, and how are we going to how are we going to be able to get enough drivers to be able to grow the fleet?.

Hey Jack. First of all, how do we get enough drivers? I don't know. Basically, it's a difficult environment. Some part of that difficult environment does keep a lid on capacity, as we all know. So, that be a blessing at a lot of times.

The freight environment, I had a -- we had a big management meeting -- last week, I guess it was and I was talking to some of our teammates and when you think about now, I always preface this way as I don't know how my five year old grandchild is going to pay for it.

But if I've only worried about the next couple of years, because I do think it's two years, I think we're going to be seeing -- I think 5% GDP growth is going to be a norm, if not more, for the next two years, based on what Washington is doing.

And so as it relates over the next couple of years, I mean, I think the freight environment is going to be hot. I think while we are failing today, we'll -- I want to say it will slow down. I mean we are at 7%, 8% GDP that goes to 5%, well, probably, or it could stay 7% or 8%.

But it could be a little bit, but it's still going to be numbers that you and I have never sensed or felt from a freight standpoint. And so I don't see that letting up, I see that a solid couple of years of being in that kind of environment..

You said something about growing fleet, how much has paying to grow a fleet -- it'd be hard to grow a fleet right now. The main driver pay is so tough right now the driver situation is so tough, it's all you can do just to hold serve..

Yes. No, -- yeah, absolutely. And that's what we're hearing from others. And so I guess when you kind of put all of those comments in context, with the efforts that you guys have been undertaking over the last year, year and a half to structurally improve the profitability of your business.

And you put this type of super-cycle on top of it, you've got to be pretty excited about certainly your Expedited, managed freight businesses as you look out over the next couple of years.

But this is -- this really has to be a very strong type of backdrop to be able to get the changes you need implemented at Dedicated?.

Yeah, you're exactly. Correct. The thing that we've told entirely through our people and it's true. And that is we are producing some numbers now that we have never produced from a standpoint of turning our company around, if I think about 12 months ago, this time 12 months ago, none of us knowing where this virus was going.

Now, none of its known its one week or five years, they were going and we made decisions to shut down the assets and the solo operation and those kind of things. They're in the second quarter last year. And to see what improvement we've made, because that was part of our plan.

I mean our plan, as y'all know, was to do up where we're at today, and the background has been has helped us tremendously. And that's why we are we're using the words internally, that the runway is very long.

I mean we got a runway, and it's everything you just talked about, it's getting our Dedicated straightened out, we could not ask for a better market to get our Dedicated straightened out, and we will get it straightened out. And we just got to work with the customers.

And again, the pipeline is good on the ones that we can't work with or decide not to work with us, et cetera. But yes, we're very, most excited we've been in 35 years in this business..

Jack, one thing I'd add on the driver piece that David mentioned, is that we may get some help if or when -- hope it's well planned. But when, let's call it, the government subsidies and so we could argue that might help a little bit.

But on the other hand, with all the energy around an infrastructure bill and spending, we know, that's probably construction, in general, is a monster competitor of our industry.

So, if that gets approved -- whatever gets proven, I don't matter if it's when -- it's or if but when, that's going to be a big pull from -- because, again, where the market is, because those jobs are going to have to need to be paid and they're going to probably be wealthy as they are now.

So, I think, the view on labor, which is affecting all kinds of industries right now is going to be a -- it's going to be a capacity constraint, does it drive inflation or what does that do? And all that -- that's another question that's out there, too. But I think capacity is going to be limited. The OEs, the manufacturers are limited capacity.

They're not ramping up in a major, major way. So, because of labor, because commodity pricing, because of the costs. And so I think the capacity part of this equation, I agree with David 100%, the next couple of years at least capacity is going to be what's the right word I'm looking for, it's going to be reasonable.

It's not going to be crazy, people growing fleet significant amounts..

Okay, that's very helpful. Last question, I'll turn it over. Trump, I'd love to bring you into the conversation here around cash flow, because the capital needs this year are not great. I think the net CapEx is about $20 million. I believe that's what she says in the press release for your plan for this year.

How should we be thinking about, you know, free cash flow in 2021 is can we get kind of help us think through that?.

Yes. So, we took a little bit of a step backwards from a debt perspective in Q1, because the indemnification call, but our plan is to pay down debt and to continue to buy back stock as we get it. So, I think from a free cash flow perspective, rest of the year, probably in the neighborhood of 80..

Okay, that's great. That's great to hear. Thanks again for the time, guys. Appreciate it..

Yes..

Thank you. We'll take our next question. Caller your line is five, please state your name..

Yes, Scott Group from Wolfe Research. Thank you. Good morning guys..

Hey Scott..

Hey Scott..

So, just on Expedited side, can you just talk about the underlying pricing trends there? And if we're doing 9% margins in the first quarter, and you think about those margins the rest of the year?.

Yes. Scott, there's no doubt that the pricey side on the Expedited is -- has been very strong over the first quarter, definitely the last -- sometime in January, last two and a half months, it has been very good. And we expect that to continue. We expect that that there's going to be more opportunities to raise pricing in the Expedited side.

And we've got three or four accounts that are topic counts, but those are those are yearly kind of negotiation that we have. And a lot of those -- couple of those have already been pulled up. They're pulled up in the first quarter.

So, those are using that, May -- April May timeframe, we're able actually to get some a couple of months ahead of time and so that's already taken. The benefits -- I say that I said, we won't go back to those customers and demand another one until the one year is up.

But the rest of the accounts that we've got out there is that we're looking at it on any new business that comes in, it's coming in at a higher price.

And we know we expect -- we really believe that our Expedited model that is going as you know, can be volatile, and that we've always operated it when it was 75% of the total, today is 35% of the total is that we expect, we expect that that number to have about instead of being 85% to 95%, we think it's going to be 83% to 93%.

They're in tough environments, they're in tough environments, it's 93%. And they're in great environments, going be 83%. We're also dealing with long-term contracts with customers.

We got in our top five, we got -- we're working on our second one that have multi-year contracts that do not allow them to downsize the fleet if they elect to -- it's over a couple year period of time. So, anyway, they're multi-year contracts on those.

So, anyway, at the end, the most important thing that I said there is that prices will continue to increase. But to me, the most important thing is that we really believe we were running that 83% to 93% LR is that model today instead of where it used to be..

I think Scott once thing I'd add is we talked about it at the last quarter call that there is a difference versus history. When Expedited was much bigger piece of the pie in good times, we're always trying to grow it. So, we grew it, which added to the volatility factor of the model. Now, we're not.

Now, whether or not we could if we wanted to, isn't that the question because the drivers, but it's strategically we have made the decision, we're very happy with the fleet size, we're not planning to grow the fleet size, the division is performing very well.

Take that pressure off to continue to grow the capital base and to feed that thing, but to improve it inside of itself. So, that in and of itself, which only time will tell if that’s successful or not.

But it helps the volatility question significantly, in my mind, who's lived through a lot of the different cycles of the past that says, oh my goodness, I wish we hadn't done that 200 trucks in or that 400 trucks in or whatever. So, now we're living with it.

And so that's only time will answer that, but that's a significant move for us versus the past, that's contributed to a lot more volatility as a lot of the growth, frankly, at the wrong time. So, we'll see how that plays out.

As far as margins, Paul, how would how would you comment on the margins?.

I think incrementally better is that as the year goes on, again, kind of back to the same comment. If driver stays high, the market stays high. I think it'll get incrementally better each quarter, not materially, but incrementally better. Won't be dealing with weather and some of those..

Can I just follow up? I'm just putting those comments together. If the right range is an 83% to a 93% OR for that Expedited business, I would think this is the kind of environment where we'd be closer to that 83%.

Why wouldn't we start trending closer to that level?.

Good question, Scott. I think we're not where we want to be yet; A. B, we did disclose quite a bit of kind of temporary costs coming back into the model to start 2021. So, we did work through that it ended up being a little bit less than we thought. But nevertheless, we did talk about that.

And so we're in transition to that and we think that that will continue. Now that said, 91% is the best first quarter in Expedited's history, also. So, I could -- first quarter is always the worst quarter for Expedited. And so I think that we've -- Expedited had started off the year -- yes, it's a good market, but it started off the year very well..

Yes, Scott, you know, is it going to get to an 83%? I don't know. But is it going to improve every -- should each quarterly be better than the first quarter sequentially? Yes..

Yeah. And so I guess big picture, though your point is, we've made a lot of mixed changes in the business here to improve profitability and reduce sort of cyclicality here. And yes, we're seeing tremendous, benefits of cyclicality on the upside. But, we're not chasing the market.

So we don't think we'll see as much of the pressure, the downside of cyclicality, if and when that environment emerges..

Absolutely, that's been the plan. We've been working on for the last five years-ish, I would say. But I think here in the last year, frankly, they're all the difficulty for all of us. It actually accelerated, the transition there's no question about that. But I think that, where we are has given us a lot of confidence.

As we move -- as we said, in the prepared comments, and prior year, the cyclicality. We're starting to see less. We didn't go down. Fourth quarter was a good quarter from a freight standpoint. We didn't go down near as much. We're not going to go up near as much in the fourth quarter either.

And so you're going to see in prior year, more or less volatility, and then year-to-year we hope, but from the cycles will be less than we've had in the past..

You know, Scott a couple things.

Joey talked about expediting being less volatile, long-term and because of the kind of constriction on the size and really kind of dialing in, what we're doing and who we're doing it for, and maybe not being as exposed, the getting dedicated, getting that 50% of those dedicated drugs, where we need them is probably the biggest key to that.

And then the other things don't forget is the cost structure changes we made last year. Those are also aiding and helping make the returns the margins more consistent..

Now, one thing to -- I had a friend in here remind me, expedite even though is the 91, I mean, weather hit it hard in February. And so a lot of the earnings impact hit our Expedited group the most, and still achieved 91 in the first quarter.

So that would have been Scott, just a minimum of probably two or and points for the quarter two to three for the quarter -- was the negative that weather hit in February on Expedited. If you hadn't had that weather, if that had been an April or something you probably ran 88..

Okay. Very helpful. Thank you, guys. Appreciate it..

Thanks, Scott..

Thank you..

Thank you. And we'll take our next question. Caller, your line is live. Please state your name..

Hey, guys.

How are we doing?.

Good.

Who is this?.

I'm sorry. This is Dan Moore with Scopus..

Hey, Dan. We didn't hear. Good to hear you..

No worries, no worries. Congratulations on a great quarter, and obviously challenging operating environment. One thing I wanted to focus on a little bit more was dedicated. And, I think most people view that as extremely important segment to long-term success of the organization and the turnaround you guys are progressing through.

And, Paul, you kind of said as much with Scott on the line a second ago. What I'd like to ask is your peers tend to focus on double digit returns and dedicated not 8%, not 6%. Someone would argue that something, in fact, north of 10 is necessary to generate the kind of returns on assets and that you want to be able to deliver long-term.

Could you talk to us a little bit about, what your return profile is in that business long-term? What you're targeting? And I guess, it sounds like, it sounds like the driver environment is the biggest impediment. Beyond that, if there's anything else we need to be aware of? Thanks..

Yeah. I would say right around that double digit number, Dan. I mean, I think we're -- I think we would all be pleased right now, getting that segment down to a 90 -- very low 90s. We've got -- we've got some accounts that operate, some legacy accounts, good accounts to operate in that space. And we have a long time.

There's as a gone through this journey, really trying to, as Joey said, bring three dedicated weights together, get them all under one operating system, under one leadership team. One recruit, you know, one group of people recruiting it. One of the things that has become evident is, there's kind of, there's two groups of customers in that bucket.

There's the customers that have the profile you just talked about, and we want more of those. And we're going to go to the customers that we have that with and say, can we have more your business.

And then there's customers who have just commoditized, dedicated, and right now, those are the hardest accounts to see and open trucks, and they're either going to have to value it, or we're going to give those trucks to somebody who's in the first bucket. And, what we've tried to stay true to is to the kind of our, our culture and our history.

You know, we met with somebody a few weeks ago that talked about another company, just yanking a bunch of trucks out, we're not to get bunch of trucks out. We're going to honor our word. But we also -- we're not going to run dedicated 98, 99 or 100 OR..

And also, Dan, just it's important is that the complimentary nature of our services, especially on the truck side, it is a neat compliment between Expedited, dedicated, and we're just scratching at the surface on opportunities that that -- most, one of the things that Paul's in his change with him to take on the leadership role on the operation side.

I think there's a couple of really neat projects there that really exposed there been there. We've talked about it, but I think, kind of trying to run a move the ball in that regard. But I think there's -- there are complimentary, especially from a driver standpoint. And so it's just something that, it's not that, yes, they're standalone.

But there is some complimentary nature between this various services and into the driver side. I think there's some opportunity there. That helps us internally as well..

Yeah. To Joe's point, Dan, I mean, we're just looking at how do we strategically manage the lifecycle of a driver and give them career options, you know, come to covenant never leave. And we've probably got the best collaboration that we've had in my 12 years here and starting to move down that path. And so we're -- there's still a lot of work to do.

But we're excited about, where it might take it..

And just as a follow-up to all of that.

Could you touch on, when you'll have had an opportunity to touch 100% of those contracts within dedicated? Because I don't know what percentage of those contracts, we don't know are one year, a multi-year?.

We will have pledged two-thirds of them by September 30, two-thirds of them by September 30. And so I think we'll know closer to where we are in Q4. So, earlier I said there's a number of them that are June, July, there's some that have some notice requirements that we're working through right now.

And you know, so those might take four months, five months..

And so I do think that, we will know in the second quarter where the field is that..

Yes..

I think that, we'll know which ones we're going to be successful with, which ones we're not going to be successful with. And then looking at our pipeline, or the ones that are not, but that will be implemented in that third quarter. But I think that, will have an idea. We're going to know the second quarter, how the field is laid..

And Dan, that the pipeline, I mean, just its I mean, it probably goes without saying, but the pipeline or all accounts that would fit in that first bucket of partnership, value, engineering, problem solving, not commoditize, smaller fleets compared to maybe more commoditized that fleets..

Got it. Congrats again on a great quarter and best of luck through the balance of the year..

Thanks, Dan..

Thanks, Dan..

Thank you. We'll take our next question. Caller, your line is live. Please state your name..

I think I've been released. This is Nick Farwell.

Can you hear me, David? Joey?.

I can. Hi, Nick..

Good morning. I'm curious I missed the comment about free cash flow. I apologies.

What was the number over the next six months or annualized?.

So we think it's kind of going to be in the neighborhood of about $80 million of free cash flow for the next nine months. If you will for quarters Q through four..

Got you. Okay. Thank you very much.

And the other question is, David, what do you believe is a reasonable OR and dedicated once it's stabilized in a more normalized, whatever the hell that means environment, do not get something below 90 given that as an example, 90 seems even with swift to have achieved their old, sort of low to mid 80 OR?.

Yes. Yes, what you just said, there is the internal discussions that we're also having, Nick. And, as you heard earlier, about half of that fleet, half of our dedicated businesses in the low 90s, let's say, it's 91, 92. I mean, there's sprinkled in there, 88 and 87s, and as I'm sitting here looking at it, there's quite a few of those.

But our first goal is to get one 102s, down to 92s and then we'll see where the market is going to allow us to go. So it's one of those things that I feel confident we can get it, take 10 points out of those underperforming assets, and get it for the first sale.

And that's why Joey earlier, some time or another either released from one of these questions, that he said that fourth quarter, first quarter, second quarter, next year that we're working toward that.

So, I mean, what you're saying and what you just say, it is exactly what we are studying and seeing our sales, and half our fleet is in those -- in that range. But we got to first get our -- second -- we got to get the other half down there, it is acceptable number..

And what would you say, I know, you've commented a bit about under the same sort of parameters, where do you think you can get long haul over the road business? Where do you -- what's in OR do you think might be sustainable, again, in a whatever the hell normalized environment?.

Yes, yes. We do believe that, where we used to be in that is really -- it is really 87 to 97. And then when the fourth quarter came and became, we would get into 82s and 83s. That was kind of the model that we operate on forever. And then the first quarter with breakeven make a little money, those kinds of things, because the Expedited was 75%.

And it is operated at 97 OR. And so it was at 87 to 97. And we have changed that, and I thought that the 83 to 93, and it's not long, to be honest with you that I could see possibilities to 93 is too high. But that they you heard them talk about the month of February, we just came out of first quarter with the 91.

And it cost us two or three points in two weeks in February, because of the -- just the cost of Expedited, the cost of two people in a truck and a lack of sitting in Wyoming for 24 hours. And snow and ice and all that kind of stuff, it just the cost can get there.

And so you saw that its 75% of the total when it was, and today is 35, we're going to even make it less than that. So there is a range, whether it's 87 or 97, and now it's 83 to 93, but with a horrible February and it was in the high 90s, I can tell you that the OR was in the high 90s in the month of February, we operated in 91.

And February costs us two or three points. So I can almost say that the first quarter, but we've never been there, but the first quarter may have been at 88 or 89.

And so that said, I feel comfortable 83 to 93 is the number when is in a normal capacity, then that's probably at 85 or 86, because today is not normal, today is unbelievable, frayed environment. So anyway, it's better. It's probably better about five points than where we've ever been in 35 years. And can it get better than that? Yes, it can.

But -- and we're trying. We're working our bottoms off to get there. And Paul said earlier about the costs, you need to look at those -- that P&L statement. We have cut so much costs out of this company. I'm so proud of the folks, and we're continuing to cut costs.

So every time we cut the costs, it is absolutely making it a better operating from financial standpoint, as long as you don't have insurance going up 40% as it did April 1, there's some headwinds. And so I hope I answered your question..

Yes..

Hey, Nick, I want to clarify something real quick, just your question on cash flow. If you're thinking about net debt right now, we're about $123 million. We've got net CapEx for the rest of the year of 10. We've got some cash tax payments. So if you think about it, we're going to try to get down to about $80 million to $85 million of net debt by 12/31.

So that changes the numbers a little bit..

Got you. Okay. That's still a hell of an accomplishment. $43 million -- $40 million to $45 million..

Yes. Yes. The model and the cash generation, there's another place that you can see it, week-to-week, month-to-month, quarter-to-quarter I think that the growth of the non-truck in the consistency of that growth is really contributed to the cash flow..

Joey, while you and David have been around a while in this business. And as an observation, I'm just curious, we've talked, you have and other trucking companies have talked about the constraints on the supply side, drivers, for example, obviously, is a critical factor.

And you guys contracted your business, other long haul truckers are contracting their business and yet in one might hypothesis that the demand for long haul carriage is, it hasn't changed in a significant dramatic sense. In fact, if anything, clearly, with this current pandemic, it's probably increased dramatically, hence, the rate increases.

So I'm just curious with the long haul business being restructured by a number of companies, and yet demand is still if not exceeding what it might have been earlier, it would seem to me the pricing would be better than stable for some period of time, maybe two, three years.

I know that sounds rather bizarre, but with this significant imbalance in supply and demand, I could see -- I could conjure up your over the road long haul business, perhaps sustaining something in the low 80s..

Yes, I think -- yes, I think there's several factors that we've seen, Nick, probably call it a little gun shot over the years is, whenever the Expedited pricing really explodes, it -- competition grows. Now, I think the competition will be different through the cycles going forward, mainly around other freight providers, let's call it the LTL space.

And so we all know a lot of the LTL is outsourced, certain amounts, whether union or non-union. And so we've seen, there is an amount that a customer even on the private company side, we really serve an Expedited produce in the LTL space, those are the big swallowers of our Expedited product.

And there's some big shippers on the produce side, there's a huge shippers on the LTL side, and there's an amount they'll pay, and then there's an amount they won't pay. And so we've tried to be very respectful and snugging up to that line where they don't say well, I'm going to grow my own, so I give it -- you for that.

And so that's where you're constantly trying to find is where that is and still provide top notch service because both of those segments require it and you can't fool them and then the outsider of that is where does pricing again depends on where fuel is, where does pricing pushes to where I'll give up the service and so I'll go put it on a rail.

And so those are the things you're trying to watch, you have some big customers that can quote, try to go and do it themselves that have higher pay brackets than we do, or when does the price push them to the rail so that can get a container, all spot and space and the chassis and all that stuff. And so I agree with you though directionally.

I agree with you, there's stuff still got to go and then when you put where overall inventories are across the supply chain, which is stupid low. I just speaks to, I think, it's gone as David said, several paragraphs ago, on calls ago, I think Expedited is in a good spot at least for a couple of years. It's just our opinion..

Thank you very much. I appreciate it, Joey. It's very intriguing environment for you guys with capacity. I don't mean just you, but anyone in the trucking business that has legitimate capacity..

Yes. Yes. I agree..

Thanks Nick. Casey, we have any other questions..

And speakers, we have no further questions in queue..

Okay. Thanks, Casey. Thanks everybody for joining us on the call. I look forward to visiting with you all next quarter. Thanks a lot..

Thank you, ladies and gentlemen. This concludes today's teleconference. You may now disconnect..