Thank you for joining Forward Air Corporation's Fourth Quarter 2021 Earnings Release Conference Call. Before we begin, I'd like to point out that both the press release and webcast presentation for this call are accessible on the Investor Relations section of Forward Air's website at www.forwardaircorp.com.

With us this morning are CEO, Tom Schmitt; and CFO, Rebecca Garbrick. By now, you should have received the press release announcing our fourth quarter 2021 results, which was furnished to the SEC on Form 8-K and on the wire yesterday after the market closed.

Please be aware that certain statements in the company's earnings press release announcement and on this conference call are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements which are based on exemptions, intentions and projections regarding the company's future performance, anticipated events or trends and other matters that are not historical facts.

Forward-looking statements can be identified by the use of words such as anticipate, intend, believe, estimate, plan, seek, project, expect, may, will, would, could or should and the negative of these terms or other comparable terminology.

This conference call and the Company's earnings press release contain forward-looking statements, which include, but are not limited to, statements relating to future operations and results, any statements of plans, strategies and objectives of management for future operations; and any statements about future financial or operational targets and the likelihood of achieving the same.

These statements are not a guarantee of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements.

For additional information concerning these risks and factors, please refer to our filings with the Securities and Exchange Commission. The press release and webcast presentation relating to this earnings call.

The company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. And now I'll turn the call over to Tom Schmitt, CEO of Forward Air. Please go ahead..

Thank you, Brad, and good morning to all of you listening in. On our last earnings call in October, I said that 2022 will be our double-double, double-digit margins, double-digit annual revenue growth, as we had committed in 2019, if you think back on our Investor Day in New York in June.

So I'm very grateful that my teammates and all of our independent contractors decided actually that they are living one of our leadership imperatives and decided they don't wait. So they pulled the double-double Forward from 2022 to 2021.

Last year, 2021 actually was a double-double, easily on the revenue growth side and the adjusted operating margin actually came in for at 10.1% for the year. Our record fourth quarter with a $1.40 EPS helped us get there. So congratulations to all of our teammates, to our independent contractors, I'm so proud of pulling this double-double off in 2021.

We took this momentum into 2022. January, we just finished, obviously, the first month of the year, had very, very strong LTL volumes, up almost 11% over January of 2021. And the revenue of that LTL volume was almost 34% up over last year's January.

So that gave us a lot of confidence, that strong month for our Q1, which led us to a guide of a record $1.17 at midpoint EPS for the first quarter. We also feel pretty strongly that we are ahead of the EPS target for 2023 at this point. We gave a 2023 full year target in our October earnings release.

And again, at this point, we are ahead of pace for that target. Now we will keep the momentum going with more shipments in LTL, both from our existing customer base and also through digital access to small and medium-sized businesses that we are going to be selling to more and more directly.

We also will not just get more shipments in place with existing and new customers. We also are getting more real-time with dynamic pricing. So when we have slower periods, slower days, slower months, we can adjust pricing almost real-time.

Between more shipments with existing and new customers, digital access and dynamic pricing, we are very confident that we have a good chance of margin expansion in LTL; 1.5 to 2 percentage points this year, 1.5 to 2 percentage points next year also. We also will, with that growth further expand our footprint.

If you remember, the last 18 months, we expanded our footprint primarily with more access points in secondary markets. The second half of this year, we're actually going to add second terminals in some of our primary hub markets, 4 or 5 for this year and further footprint expansion to come in the subsequent years. Now this is not just an LTL show.

This is the main show LTL, but our complementary businesses are doing their part also. Truckload is tag teaming tremendously well with LTL, both from a recruiting front and as well as a load coverage front.

Final Mile is winning more awards from some of the most demanding retailers on earth, and those awards actually translate in getting awards for additional markets. We just launched Memphis and Richmond. Intermodal in 2022, those keep doing what they're doing, which is consistent double-double performance.

And on the M&A side, in addition to the organic growth in LTL, TL, Final Mile, Intermodal, we will do more and possibly also bigger. We had tremendous success with our tuck-ins, specifically in Intermodal we had 3 tuck-ins last year, building out our geographic footprint. We'll continue doing that.

And we also said that the J&P Hall in the LTL space last year was perhaps an appetizer, an amazing appetizer on the LTL acquisition front and the main course may follow here also. Brokerage, we are primarily building out our capabilities organically.

However, as and if and when it makes sense for us to add to that organic build-out inorganically, we certainly will be open to doing that. So if you look at all of this together, we've got a ton of untapped upside, we're on it.

And I feel extremely confident about the performance potential, and I'm very grateful about the performance reality that our teammates and independent contractors made possible. So we're on it. And we're going to go straight to our Q&A and Rebecca and I will tag team as always. So with that, Brad, let's open the lines for Q&A..

[Operator Instructions]. And our first question comes from the line of Todd Fowler with KeyBanc Capital Markets..

Tom, on your comments about the 150 to 200 basis points of margin improvements that you're expecting in '22 and '23. I guess, when I look at where you came off of in '21 on the LTL side, close to 300 basis points. It seems like that the pricing environment remains very strong. Not trying to discount obviously good margin improvement.

But can you speak to maybe why it wouldn't be a little bit better than that just given the pricing environment that we're in and kind of the return of tonnage that you're seeing?.

Yes, Todd, good morning. Thanks for asking. I mean, what we tend to do is obviously control what we control and then react to what's going on around us. There's a pretty good chance that the pretty overheated perhaps freight environment over the last 18 months is going to cool down.

That cool down is probably not going to happen this month or next, but more likely in the second half of this year. And 2023 is kind of a question mark there also.

So you're absolutely correct, with the type of tailwind that we had seen over the last 18 months, those numbers may be on the conservative side with a headwind, which we should be expecting, we still will see significant margin expansion.

And those 1.5 to 2 percentage points we see this year, and then we see obviously another 1.5 to 2 percentage points next year. For a headwind environment, I think that would be quite remarkable. For a tailwind environment, you're absolutely correct. This is probably on the conservative side..

And we do have a question from the line of Jack Atkins with Stephens..

So I guess, Tom, if we could maybe kind of start, I'd love to get a sense for how do you think about backfilling the capacity that you've kind of created in the network over the last couple of quarters through the actions to really cleanse all of the unpalletized freight out of there.

How much latent capacity would you say you've got in the network currently? And as we kind of think Forward over the course of 2022, would you expect to kind of refill the network by the time we exit the year? Or is it going to take maybe a little bit longer than that?.

Yes. Great point. Obviously something that we are modeling. The situation we had by late spring of last year was, we were actually running into a capacity constraint in some of our major terminals. The cleansing gave us, in essence, de facto 15% to 20% additional capacity just by unclogging the floor.

With the types of growth rates that we see, we probably by the second half of this year will start being in a similar situation as we were in, in spring of last year, which means we're going to start running into some capacity constraints as we are heading into peak in a few of our major terminals, which is why we're actually adding second terminals in some of our major markets towards the second half of this year.

We're going to go at maximum possible speed. This is a high-quality problem.

If we dial in many of those 8,800 prospects in the small, medium-sized business segment that are in the high-tech industrial goods, medical devices, parts, automotive industries, then obviously, we hopefully will get into a high-quality problem faster where we run into capacity constraints even more than what we currently model.

So yes, backfilling is happening.

We have a strong sales force, a strong sales machine that's actually propelling that sales force, selling both into our traditional customer base and then as I said before, with brains, arms and legs as well as digital access more and more also into these small, medium-sized prospects in those high-value industries I've mentioned.

So we will run into some constrains second half of this year. And if we actually are even more successful than we think we are backfilling, then we are running to a debt constraint even more than what we currently model and that's going to be a high-quality problem..

And we do have a question from the line of Scott Group with Wolfe Research..

It seems like we're getting one, so I'll just combine a few into one. The 150 to 200 basis points of margin, is that consolidated? Or was that just the expedited piece? Obviously there's a huge mix shift.

How are you thinking about that from here? Is there more to go on the -- on that shift towards heavier weight or are we sort of in a good place? And then how are you thinking about pricing and GRI this year?.

First of all, Scott, good morning. And by the way, just back to you, Todd, and to you, Jack. If there is any more back and forth, there's no constraint of one question per person at all. So we can go as long as it's helpful. Scott, to your specific points.

On the LTL, sorry, on the 1.5 to 2 margin expansion points this year and then another 1.5 to 2 next year, I was specifically talking about the LTL portion of our expedited freight segment. So that's an LTL number. Secondly, mix shift.

Obviously, if you look at heavy trade containers or if you look at crates with medical devices in them, those are kind of some of the heaviest, densest freight shipments that we have. And we are continuing upgrading towards that high end. So we are far from done. This is going to be a little bit like the Nike slogan of a race without a finish line.

So we've seen a lot. We went from 600-plus pounds per shipment to 800-plus pounds per shipment over the last 6 months. So we're going to expand on that. The more we get into this kind of sweet spot of what I just described as high-tech medical device, industrial goods, trade show containers, the higher the weights will become.

So we are -- we've made a big step, and we're not done yet. On the pricing side, you saw us do a GRI last year of 7.5%. We had a very high capture rate. The sales force under Scott Schara did a tremendous job working with our customers to make sure we keep our commitments to them. We keep on time performance in a tough environment.

We invest in our drivers. We had the biggest increase in our driver pay last week, $0.15 a mile increase. That obviously puts us in a position so that we can with the GRI that we are commanding, keep making the customer commitments better than anyone else out there. And that's the type of expectation that our customers have and should have.

So my expectation this year, Scott, with GRI is very similar to last year that there will be a very, very high take rate. There are a few very, very little contractual exemptions and exceptions for the most part, when we say 7.9%, we mean 7.9%..

And then just to your comment earlier about, at some point the freight environment will slow, right? Do you think that you can keep pushing the mix in your favor even in that kind of environment?.

Absolutely. So we believe, and the numbers are a bit outdated, but we believe that there's a $50 billion-plus LTL market in the U.S. alone. Of that $50 billion, Scott, about $10 billion is the type of high-value freight that we are the most compelling choice in.

And we have -- if you take our revenue base apart and you go inside expedited freight, LTL revenue for us is shy of $1 billion. So we believe we have a 9% or 10% market share of the type of high-value freight we should be going after.

So if there's no increase in the pie at the levels that we had last year or the year before, then we just need to win the slice of pie game. When we have a 9% market share, I believe we have a lot of untapped upside, whether there's economy tailwind as there was in the last year, 1.5 or economy headwind.

If you can play a slice of pie game, we'll win a slice of pie game..

And then maybe just last thing, if I can, then.

What about -- are there any sort of cost opportunities that you're thinking about or looking at?.

Yes. So we obviously are building a backbone across our business lines, where we use a pretty expansive technology transformation, rationalizing systems. In some cases, we had 4 or 5 systems that we consolidated into one.

We also have, on the customer service side, as an example, some of the Level 1, which are the most straightforward customer service functions. We actually outsourced to a lower cost environment. We have very firm guidelines, what we expect corporate cost to be as a percentage of total revenue. And that percentage number needs to keep coming down.

It has come down last year from the previous year. We expect it to come down further. So we tend to be with precision execution, equally rigorous on the cost and efficiency side as we are on the top line expansion side..

And our next question comes from the line of Jack Atkins with Stephens..

I guess maybe, Tom, going back to the longer-term outlook that you guys have put in place for 2023, you noted you're -- feel like you're running ahead of plan for that.

Does that longer-term guidance include the terminal expansion program as well? Or would that be incremental to that? If I remember correctly, it doesn't include M&A, but I just want to clarify on the terminal expansion opportunity..

Yes. So two things. One, you're absolutely correct. So the 630 to 670 numbers, the 630 is basically a continuation of the game plan that we've been on, which is organic growth and small tuck-ins. If there is a more significant LTL or possibly brokerage acquisition, that would stretch us beyond the 630.

On the terminal expansion, minimum terminal expansion or a certain level is built in. If we -- again, if we grow faster and need more footprint than we currently foresee, that would be an untapped upside also..

And then I'm curious how you're thinking about the incremental margin opportunity within your network business, your XY network business. You've been sort of -- in the fourth quarter, you're running at about a 30, low 30s percent incremental margin, in the middle of last year, 2Q, 3Q, you were running in the low 20s.

What do you think the right range is to think about incremental margins on the incremental revenue growth in expedited LTL?.

Do you want to take that?.

Sure. Hello Jack. As we're thinking about these incremental margins, we'll just kind of think about just Q1 for the moment. So that cleansing that we did didn't really start in the benefits we reaped, were in the latter half of last year. So we do believe that there is good opportunity for us from an incremental margin standpoint into Q1.

So we are thinking that it would be in that, call it, 25% to 28%, 29% range as we're thinking about those incremental margins..

That's really, really, pretty powerful for an asset-light model like yourself. So that's great to hear. I guess maybe one other question for me would be just on how we should think about seasonality within the business? I understand there's seasonality to how freight flows across the year.

And obviously, you guys would see that in your business as well. But you also have these company-specific things going on, which should accelerate as we go through the year and you backfill the available capacity to your network, you add capacity to the network.

Can you help us think about how you're thinking about seasonality internally? Would you think the business is maybe a little bit less seasonal than it's been in the past because of the actions that you've taken? Or should we still expect to see kind of normal seasonal progression as we move through the year?.

Yes, Jack, I mean, obviously, you know the industry and our business extremely well and kind of gave part of the answer already.

So with us cleansing the freight and going to more high-value freight, there is actually a deseasonalizing or depeaking going on, specifically when we were super heavy in the lighter weight e-commerce space until we cleansed it. Remember, we talked about kayaks, we talked about rugs, we talked about carpets.

Some of the e-commerce business was the loose freight unpalletized that some of our customers could not upgrade together with us, and they actually left our system, which means we tend to have less of an e-commerce peak and then therefore also less of a coming down off of that peak in January now compared to previous years.

So I expect us overall to be a little bit less picky and less seasonal than we were in the past just based on the shift of the mix. Having said that, we still are a transportation company that has some of the same patterns that other transportation companies have. A January will typically not be a September.

And that's less pronounced than in the past, but there's still some of that.

Now having said that, when I mentioned in my remarks, us becoming more real time with more dynamic pricing, there are mechanisms, including dynamic pricing, where we can obviously by adjusting price levels on a day-by-day basis, we can actually, to some extent, counter the natural kind of highs and lows of the season, of the week, of the month and we're intending to do that.

So yes, we will be seasonal. We will be less seasonal than in the past. And we have some good countermeasures in place to actually attack some of those highs and lows. Dynamic pricing is the #1 lever in that space..

And our next question comes from the line of Todd Fowler with KeyBanc Capital Market..

So Tom, I just want to clarify, in your comments on being ahead of pace to the 2023 targets.

Are you talking about being above the high end of what you laid out or that you're on pace to be well within that range? Just trying to want to get a sense of how -- what you're really saying about '23? And then at what point would you possibly consider revisiting those targets if you're running ahead of them?.

Yes. So let's simplify the math, Todd. And so if we say, take the range and make it more simple and say, the 630 is actually the number that's equivalent to us keep running the business with some of the same parameters, which means we have strong organic growth, and we have some tuck-in acquisitions.

That's what gets us to 630 as we announced in October. If I look at the month of January, and that's 1 out of 24 data points in that '22-'23 journey, I believe there are several cents that we are ahead of that pace. Now again, that's where you and I can run math and say like, well, if it's $0.10, that's pretty powerful.

If it's $0.03, then obviously, not buying that by 24, is not giving you quite that much. But I do believe, if we keep doing what we've done even in those 6 weeks that we are into 2022, yes, you can assume that there's a few cents every month that we should be ahead.

And again, in a tailwind economy, I like my odds of being able to add quite a bit of 630. What I would suggest is we are going to be driving our business, get a few months under our belt. And if February, March, April continue the trend that we've seen in January, we should absolutely revisit that number. But we're 124th into the 2022, 2023 journey.

And I feel, obviously, fact based and correct saying that with that 124th in, we're ahead of pace. I feel a bit more comfortable if we are at 324 or 424th into that journey to revisit those targets..

That's good context, Tom. And then just as a follow-up, can you talk to your appetite at this point for acquisitions? I mean it feels like that there's a lot of momentum within the existing business. You've got a good footprint right now.

So how eager are you to look to do something? I understand tuck-ins probably make some sense, but something larger or more sizable just kind of given how the performance is in the core business at this point?.

Yes, Todd. I mean, this is one of those where we are -- we have quite a bit of experience. If you think about the last 5, 6 years, we did -- there were not big ones, but we did 14 or so acquisitions. And we have a pretty spotless track record. Every single one of them actually was value accretive.

So when we grade acquisition targets, we feel pretty comfortable that even if an acquisition target is 3x or 4x the size of what we typically have in terms of size of acquisition that the grading scheme that our M&A team under Kyle Ricketts and Michael Hance applies to those like 3x or 4x the size acquisitions also. So again, we use the same rigor.

We use the same grading scheme. If it grades out positively with a 14 and 0 track record over the last 14 acquisitions, I believe my odds of the 15th one also grading out positively and turning in the way we expect for it to turning out pretty good.

So rest assured, size by itself will not make us deviate from the same kind of rigor that we applied in the past. But if it grades out positively, we like -- we have confidence that we can make it work, whether it's 3x or 4x the size of what we typically do or whether it's the same tuck-in size that we typically do..

And our next question comes from the line of Bruce Chan with Stifel..

Tom, you mentioned the events business.

I'm just -- maybe to start, curious what you're seeing there in terms of recovery as we kind of come out of Omicron here? And how much of that is built in there with respect to your first quarter guide?.

Yes. So I'm talking rough terms here. So some of our most profitable LTL business went temporarily asleep in March, almost 2 years ago now. If I had to put it -- and so this was 10% to 15% of our LTL business and were some of the most profitable. Last year, we probably saw, and most of that was Q3, we saw perhaps 20% of that come back.

When I went through our terminals, I did see trade show containers was much less than we typically see. If we talk to our business partners who are in the event space and some of our customers, they would probably say this year, we expect about 60% to 70% to be back.

And next year, again, this is people looking ahead with obviously not having 100% certainty of what's going on around us. But next year, forecast pretty much say we should be back to pre-pandemic levels. So if it's 20% last year, 60% to 70% this year and then 100% next year, that will be wonderful.

And some of that could be upside to what we put into our numbers. We feel very confident that we have a sales machine underway that if we get 60%, 70%, that's terrific. If we don't get it, I think we have other ways to get to those types of numbers. But this is clearly upside that we are together with our customers all over making sure we make happen.

I mean take that -- put one last observation point. I mean take the example of your own conference that we just finished. We went virtual more and more time. So we're not a 100% yet. Other conferences, go in-person, concepts are taking place. So that's why I say 60% to 70% is probably quite a good -- is probably a reasonable estimate.

And again, we listen a lot with 2 years to our business partners, and they believe 2/3 or so is a good number for this year..

No, that's very helpful color, and I certainly hope that we're back in person next year. But maybe a sort of similar question on the top line for Final Mile. It looks like growth is kind of leveling out there. I'm wondering if that's more of a function of underlying demand trends in that business. Maybe people bought all the fridges they need.

Or is that more due to some of the supply chain congestion coming into the West Coast ports?.

I actually think it's mostly -- between those 2, it's probably the former more than the latter. The congestion has been going on for quite a while, and still the numbers were pretty crazy for most of last year.

I do think when you talk about a home-based economy versus an events-based economy, the last 18 months very much for many people in our lives was a home-based economy, not an events-based economy. And I think you see the starting -- that goes back to the conversation we just had, you see some of that turning.

And yes, the way you put it is probably quite accurate. There's only so many fridges you can buy. And at some point, you got them. So we see some of that happening. Having said that, it goes back to what I said in my opening remarks, if you -- if there is no slice of pie game to be one, then let's win a slice of pie game.

As long as we are at the top of the scorecards with some of the best retailers in the world, we should be getting more market shares and more awards, more markets for them, specifically the Home Depot [indiscernible] the appliance business partner of the year.

And as a consequence of that, we actually won 2 additional markets with Richmond and Memphis and those are probably not the last ones coming our way. So yes, that this is leveling off in terms of slice of pie or growth of pie. And then we are going to win a slice of pie game by just being the best partner in support of those retailers..

And then maybe just one last one here.

As you think about the fleet and how that develops over the course of the years, what are your expectations there as far as outside power versus your owner operators?.

Yes. So last year was a difficult one. I once heard, Bruce, that probably, I mean, from just talking to many of our competitors and peers, it's probably a good stat.

Of the top 100 transportation -- ground transportation companies in the U.S., 98 of those 100, the fleet actually shrank the number of trucks that they actually had seated shrank last year. We were 1 of those 98. Our fleet went down.

Now we're doing a tremendous effort to really make Forward Air a great professional home for those independent contractors. I said many times before, we do driver engagement surveys. We listen to them. We know how predictable home times are super important to them.

We give our drivers an app where they can run their business, go for the next load, make sure they understand how much revenue they made, push a button at the end of the year, so that actually tax material, tax support material gets generated.

And when they apply for a home weekend because their grandchild turns 5, we're going to do everything possible to make sure that they are home for that weekend. And they appreciate that.

The driver aboard, which is 12 fleet owners and drivers representing the thousands of them blast out to those types of actions we take in support of them to the rest of the driver community. So that's why our retention rates are probably about twice as good as the industry average. And I do see us reversing the trend that we had last year.

We are only 6 weeks, as I mentioned before, we are kind of a little bit more than 124th into the Forward '23 journey. We're only 6 weeks into 2022. But Kyle Mitchin and the HR team working with the ops team and safety team have done a tremendous job, and we are actually growing our fleet.

Our fleet right now has about 50 seated trucks more than we started the year with. And I believe 2022 will be a year of the operator as our COO, Chris Ruble, says, but it will also be a year of a growing fleet for Forward Air. I was incomplete in my answer, the last part you were talking to.

So as a consequence of what I just said, it's going to be a year of a growing fleet. I do expect the outside miles as a percentage of total miles to come down from the 20s to probably the low -- the high teens. So we're making our way down again, it'll be below a 20% number..

And our next question comes from the line of Bascome Majors with Susquehanna..

Yes.

Tom, could you talk a little bit about the cleansing and the sales incentive you had to drive that? And as we look forward to how you're changing your sales incentives to drive the outcomes you're looking for over the next 2 to 3 years?.

Yes. So Bascome, first of all, welcome to our team and to our great group of thought partners. So I mean, this is where we operate as one. It's also one of our leadership imperatives as is we don't wait. The sales team did something last year that was tremendously tough to do.

They basically were compensated on the incentive side with a revenue attainment and they consciously drove revenue away. So this is hats off to all of them for doing the right thing.

I mean Lance Small, the whole team did a tremendous job, basically doing the right thing for the company and at the same time, basically getting revenue off of their books that they otherwise would be compensated for.

Now fortunately, Scott Schara and the team actually have done a tremendous job over the last year designing a sales force compensation system, which we implemented this year. So it's actually active now that to reward sales professionals, not only for revenue growth, but also for the profitability of that revenue.

This is not rocket science, but it's something that we had to do, and I think we feel very, very strongly about doing, which is incentivizing sales professionals by the profitability of their book of business, not just by the size of their book of business.

So in that sense, what they did last year, actually, it would be a good thing and they would actually be compensated for driving some of the inefficient freight out of the system and getting more efficient, high value dense right into the system.

So that's aligning the operating model in support of our customers with the way we incent sales professionals now in place. And again, hats off to the sales team that they actually did the right thing even when the incentive system was not aligned yet last year. Now fortunately, them doing the right thing and incented to do so are aligned..

So the profit incentive just started Jan 1..

For the sales compensation, you have -- for the sales -- variable sales compensation, yes. Now just to be also very clear, we have individual objectives across all of our -- every single frontline individual as well as Rebecca and me here in the room.

And most of our individual objectives and incentive compensation as a company and as individuals in that company are obviously tied to the profitability of what we do. The variable component of the sales force compensation, specifically only as of January this year, started having a profitability dimension to it..

And combining it with your other comments about maybe starting to hit capacity in parts of your network in the second half of this year.

When you freed up 15% to 20% of the network by seeking denser freight, is that comment intended to say that 15% more shipments can be in the network in 6 to 9 months? Or is that more about certain points of the network that will reach capacity before the network does?.

Yes, it's the latter. I mean, like when we were hitting the wall, so to speak, in spring of last year, we were hitting the wall of capacity in some of our major terminals and in some of our hubs. And that's where -- and we do need those hubs, the way we efficiently route our shipments.

And so for some of those places, we're going to be at that point again in the second half of this year. So about 15 months later with some of the growth that we are driving, we will, despite the cleansing, get in some of the hubs to the same capacity constraint points that we were about a year ago. So it's less of a complete network topic.

It's more of an individual hub topic. Remember, when we last year did a project called Eagle Eye, we did look at the efficiency of routing, and we want to make very certain that we don't let constraints in our terminals drive us towards inefficient routing.

We did a good job between the operations team and with Oliver Wyman support externally to really validate what the top 3 most efficient routing lanes are for specific shipments, and we want to make sure every single shipment we actually have in our system is at least on the podium of top 3 most efficient routing guidelines..

Last one for me. You made some comments earlier about seasonality smoothing a bit with the freight cleansing. Certainly, there are some people looking at your historic seasonality and trying to extrapolate the 1Q out into something in the, call it, $6 implied range for the year.

Can you talk about where you get excited about that kind of opportunity? And where we might be getting ahead of ourselves..

So Bascome, I think that's a bit tied to what -- we had this exchange a little bit before. I mean I could do math off of 1 month and multiply it by 12 for 2022 or multiply it by 24 for '23. I just believe it's more responsible to do these multiplications off of 3 or 4 months for a year versus off of 1 month.

We do see significant upside based on what we had in 1 month. But again, the 630 destination is a 2023 destination, and we are 124th into that journey. So far, we like what we see. And I mean, you can run those types of math exercises [indiscernible].

I just frankly, would rather our team excel, do the job that we are capable of doing and revisit those goals a few months in versus 1 month in..

And at this time, there are no further questions in queue..

Well, thank you..

And ladies and gentlemen, that concludes Forward Air's Fourth Quarter 2021 Earnings Conference Call. Please remember that this webcast will be available on the Investor Relations section of Forward Air's website at www.forwardaircorp.com shortly after this call. You may now disconnect..