Okay, we're going to get started with our next presentation, Fireside Chat, rather. So we have Schneider here with us. We got Mark Rourke, who's the President and CEO, and we have Darrell Campbell, who is the CFO. So thanks very much, guys, for joining us today here. We're just gonna make this interactive. I've got a bunch of questions, but per usual, if you have any in the audience, raise your hand, and we'll get you a microphone. So Mark, you know, maybe we'll start off with just kind of the quarter and the weather. So obviously, it was pretty challenging to start the year. It kind of bounced back a little bit, but, you know, the truck market didn't quite follow.
So, I guess, what does that tell you, that reaction tell you just, like, how the market is right now, given what we've seen so far?
Yeah, Brian, well, first, thanks for having us, and certainly, transportation is an outdoor sport, so we expect weather of some sort in the first quarter. But if you look over the last 3 years, that's been more of a February than a January phenomenon. But yeah, very disruptive 8 or 9 days in the middle of the month. I would maybe draw a bit of a distinction between this year and last year when we had weather in the first quarter. I think it was very much last year absorbed pretty easily within the market. I think it was a little more challenging this first quarter. Carrier costs spiked, particularly in the spot market.
So I think it does demonstrate maybe a little tighter rope than we had a year ago, and consistent with probably some of the stats that you follow. The net revocations, I think, in January, were 3,500, which was half of what we experienced all in the fourth quarter. So I think you're seeing some acceleration on the capacity exit standpoint. And brokerage license down, you know, 9% year-over-year. So I think, again, that slow, meticulous rationalization of the market, I think, continues, but nothing dramatic.
Okay. So it feels like we're sort of inching along, making progress, but obviously not as quick as anybody would really like at this point.
Yeah, certainly, anything that we would normally expect through a correction like we've been here for the last, now we consider this a 22-month freight recession, looking at our internal stats. So but slow and steady, I think is the kind of the rule of the day.
Okay. So what we've heard, and I'm sure you've seen as well, is that some of your peers are saying the bid season was a little bit more competitive than expected. I don't know if that's what you're seeing as well, and if so, like, what do you think is the, you know, some of the reasons for that happening here?
You know, I would say really across all modes, still highly competitive. But I would tell you the customer conversations, I think, are adapting and adjusting. I think a core carrier, I think incumbency is taking a little bit more of importance this year than a year ago. And I think at least our assessment and our early discussions with customers is probably the brokerage arena, less attractive to the shipper community as they think about going forward than perhaps we've been the last couple of years. I think that's a sign. Again, I think everyone's feeling a little long in the tooth in this cycle, and those things have to happen before you start to see a hardening.
So in terms of, it's a little too early to see where rates settle out from a contract perspective. It's always a hard question because it's like, what's the customer, what's the comp, what's the tier stack? And so it's a little hard to put a fine point on it, but it does seem like from what we're hearing, it's flat, maybe plus or minus a little bit. Is that sort of a reasonable starting point, or is it a little too early to even-
Yeah, it's really early in the cycle, in the process. Brian, we don't have a lot under our belt yet that we can, you know, make definitive, but competitive, I think, is the right word. We're not chasing commitments for rate. I mean, those days are behind us, and we have some work to do, particularly in our network businesses, to fortify yields, and, you know, we're willing to trade, lack of commitment to keep our flexibility.
Okay. So when you talk to the big shippers, though, are they looking to lock in rates at this point, or are they still kind of rolling the dice maybe a little bit and pushing it a little bit further out? I'm sure it depends a lot on the shipper and kind of their procurement strategy, but is there a way to kind of characterize what these conversations are right now in terms of how they're viewing the market and therefore at least how a big, you know, component of freight is possibly looking at how this cycle plays out?
Yeah, it's probably difficult to overly generalize because that is a customer specific. I would tell you, I don't see any behavior that people are trying to move things up to, quote-unquote, lock in. I think things are moving at their normal cadence. And I again would characterize, you know, we just came out of RILA. We had 20-plus customer discussions, and I think overall, the sentiment that we walk away with, and I think it's the right one for everybody, is that incumbency asset base is more in favor as they're going through this allocation season than perhaps a year ago. And I think, again, that's all a sign that people want to be more prepared for when things do recover, and I think we're on that path.
So again, our position is particularly in the network space, where we're not looking, quote, to lock in. We're looking to make sure that we can pivot, and we can move to the quality freight at the right rate. And so I think really, at this juncture of the cycle, is the most prudent thing to be focused on.
Okay. So yeah, excuse me, I was going to ask about that in terms of trying to balance, the commitments to your big customers with the asset, the utilization. Maybe it's lower for longer, maybe it's not. It's always hard to tell at this point, but, I guess if it doesn't come in as strong as some of us might hope, then how do you sort of manage through that, knowing that it's going to turn at some point?
Yeah, I think maybe embedded in that question, Brian, could be, what are you thinking about the capacity levels? Do you make some adjustments there? I think we're reluctant. At this point, we've bled down our network assets over time, growing dedicated very purposefully. But at this part of the cycle, it would be, I think, in our best interest to try to be very balanced towards that, so that we have the assets to take advantage, really, across our multimodal platform of intermodal truck and brokerage, to seize the opportunities as they present. So I think we're at the right level of capacity, at least in our network offering.
What you're really seeing, our focus is to bring more variable cost solutions into our network, like power only, like owner-operators, so that we can pivot and not have as much fixed cost, but still pivot quickly as the market opportunities turn. And so I think that's really our position. That could change, obviously, as we see the year play out, but I think right now, we're on our same base thesis that we'll have a heavier weight to the second half, and things feel to be progressing in that fashion.
Okay. So yeah, just on the pivoting, excuse me, is this gonna be a different sort of balance going forward for diversified models like yourselves, and maybe the whole industry, where there is more power only, there is more logistics and maybe not as much of the core network business, you know, on the way up, because we've seen, obviously, some of the challenges of managing that on the way down?
Yeah, certainly. Our experience with power only. Now we've been through an upcycle, we've been through a down cycle. It's proved very durable from a carrier standpoint. It's proved very durable from a shipper standpoint. And I think that's one of the advantages we have of having large trailer pool asset-based play, is that we can pivot along these capacity types. And I think it's prudent that, particularly in that more commoditized network space, that you have this flexibility, particularly at a lower cost, a lower fixed cost investment to do that. And so I think we'll be able to seize and play across all three of those capacity types in the network to effectively serve our customer, but also, you know, try to be very mindful of the cost and what we're making into that network.
Mm-hmm. So you mentioned the, the back half recovery. It seems like that's kind of the, the standard, assumption for most of the companies in, in transports. But what I found is that some companies have different views or at least different, you know, factors embedded within that outlook. So maybe you can talk about if anything in there is, is more Schneider specific. And then, Darrell, maybe you can comment on just sort of the ability to, to ramp up, because it does seem like from the $0.20 or so in the fourth quarter, that would imply, you know, a pretty good acceleration to sort of get into the range you're talking about here. Just a couple points there.
Yeah, you got a lot to unpack in there, I think, Brian.
Just a little bit.
Let me just maybe unpack as we're thinking about what our differentiators are and where we can get real leverage. And certainly, we've talked a lot about truck, but maybe pivot for a moment to intermodal. When we believe we can grow our business 25%-30% from a volume standpoint without any incremental investment in container assets or chassis assets, and we're, particularly with the good service performance that we're seeing really across our entire network, we're getting the fluidity back in the turns that we believe can be a real catalyst for us relative to good incremental margins on growth and intermodal. Secondly, now we're in our second year. Bit more experience now with our Western rail partner, who's done a really nice job on the service front.
We got to make sure we're keeping the lean in on the commercial side to make sure that we can win volume, particularly against over-the-road alternatives. And we're really excited about the CPKC. Mexico is going to be an increasingly strategic thrust for us. Terrific opportunity, particularly in intermodal, because it's just so underrepresented because of the lack of a viable truck-like service for intermodal out of Mexico, and we're in our real first allocation season now after that mid-last year announcement. And then certainly, the CSX is a terrific truck-like performer and continue to sustain their performance. And so when we look at that combination of asset centric across those now three rail partners and now getting our experience into this allocation season that we took from a year ago.
So, I think that's a great catalyst for the company, and it's a great catalyst for that segment of our business.
So I guess I'll just jump in here, Brian, at this point. So I think the fourth quarter is probably not the best benchmark.
Mm-hmm.
Right, to look at in terms of our run rate, but going into the fourth quarter, we did see some stabilization in pricing, as you saw, some volume improvement. So some of the stuff that Mark was talking about was really, what are the things that we can control? Asset productivity is one of the biggest things. So we are sweating our assets on the network side. We're only investing where it makes sense. You know, pricing recovery in terms of things that we can control on the network side, not chasing volume. Obviously, that's embedded into our numbers as well. So the combination of self-help items, cost containment, in terms of our input costs, are also embedded within that recovery.
And probably a little bit, too, as we talk to customers, I don't think anybody of material in our book feels out of whack on their inventory levels, which we were battling all a year ago. Our dedicated business was healthier because we were taking the inventory from the DC to the store, but our network business, both in intermodal and truck, is based a lot on that network replenishment. And so you combine the slow bleed out of capacity, inventories being in line. And we're really long in this cycle, kind of what is embedded in our forward-looking guidance.
Okay, that makes sense. So, Darrell, maybe stick with you for a second. In terms of the cost savings, and other initiatives on productivity side, you know, relatively new to this business, I'd be interested to see, like, what you see that can be more efficient, and also, given all that we talked about, just being mindful that, you know, this thing could all turn tomorrow. And so trying to-
Mm-hmm.
Make sure you have enough capacity and maintain that balance.
Sure.
But also being more mindful of the costs as well.
Yeah. So I think, you know, Mark mentioned the word balance probably five times because it's very important. I want to make sure that we're not overreacting to the environment that we're in, so that we're well positioned, which we are, for the recovery, which is impending, right? The great thing about Schneider is that throughout all cycles, we're very efficient and disciplined as it relates to cost, so we don't wait until, you know, a downward freight cycle, you know, to start taking action. So, you know, there are things that we started in 2022, that started to bear fruit in 2023.
As we're going through our budgeting cycle, there are incremental cost opportunities that we're looking at, you know, adding to things that we've done before, but we're always looking for ways to be efficient, mostly on our input costs. So, driver productivity, asset productivity in general, recruiting costs, these are all things that we continually focus on. And, you know, what we've seen in our variable costs, at least, throughout the cycle, is that we are resilient in those areas.
Okay. So in terms of one of the other costs that came up quite a bit during all during the season, would be insurance.
Mm-hmm.
I think you were a little bit more unique, and then some of the frequency rates were coming down.
Sure.
But obviously, it's a very tough market, so maybe you can walk through how that affects how that affects Schneider. What, Mark, maybe you think that'll have an impact on the on the broader market at some point? Because while it seems like it's a big, you know, big fleet problem, obviously, it does affect you know, everybody who does haul freight.
Yeah, and our real focus here, Brian, on safety is every exposure that you can eliminate, not only is the right thing to do, but it is good business. And so one of the things we're really encouraged by when we see this road to autonomous is all the technology that we can adopt in advance of that, to help our drivers be the safest drivers on the road. So whether it be collision mitigation, lane mitigation, now mirrorless, which allows us then to almost eliminate all blind spot. All of those things were early adopters, and we see it in proven benefit in our metrics. And again, that's the first line of defense, is just eliminate every incident you can that can lead to an exposure.
That being said, we're in a tough world of litigation, and costs on just about anything go up, whether it's a small fender bender or whether it's something more serious. And so, Darrell has kind of led through the insurance renewal process, which we're pleased that based on what we're hearing from some others, that it was going to be more onerous, and I think we were rewarded with our results, which the actuaries are pretty smart folks, and so they kind of poured through that. But I think we did quite well considering the environment, and so it's not going to be quite as inflationary as we perhaps may have thought even a quarter ago. But still something we have to be highly focused on.
It's an area that still we would call inflationary, but it's something you can't lose your focus about it.
Okay.
So, so I'd clarify, not a decrease, right? But not as big of an increase, I guess, is the way I would say it. So the fact that, you know, the two more significant claims that we had, or development in, got so much airplay in the fourth quarter is just a testament to what our track record has been. So in terms of severity, we went, you know, four years without anything of that magnitude, and the frequency in the same time has gone down almost 20%, right? So that doesn't happen without a lot of dedicated focus across the board, you know, which is what's led to our track record.
Right. Yeah, I don't think decreases are maybe in their vocabulary for, for insurance. But all kidding aside, in terms of the longer-term outlook, you know, for, for reform, I guess I know the industry has been talking about this for, for quite some time. Is there any line of sight to that potentially happening? Like, it just seems like these increases, these nuclear verdicts are just getting, you know, unsustainable.
Yeah, there is some good news out there. This is a state-by-state effort, but you're seeing efforts for reform in places like Louisiana, which Wisconsin just passed and took to the governor's desk, caps on non... What's the word I'm looking for, Darrell? Non economic damages.
Okay.
All those things are starting, and those are trucking-specific initiatives. And so, you'd like to see something happen at the federal level, but if you can't get it at the federal level, go to state by state. And there's probably been more progress in the last 24 months than there has been in a decade. So it's getting the attention of the legislature, and it's not good for the economy, it's not good for our consumer, it's not good for pricing. And so, I give the ATA and the state-level agencies just great credit for getting the message out, and we're starting to see some progress.
That's good news. Excuse me. Just pivoting back to intermodal for a second. And we saw the news from Walmart, who's getting out of the private fleet. So just wanted to see how. I guess a couple of questions, like, what does that signal maybe to the market in terms of private fleets. Never really quite understood that personally, how they could make that economic, but curious to hear your thoughts on that. And then is there any impact of them, you know, giving up those boxes and having a deal with J.B. Hunt? Like, does any of that give you more opportunities to serve Walmart less, or does it not really matter?
Well, Brian, I think you hit it on the head. I think it just speaks to the demanding nature of running an intermodal network, whether it's the execution, the balance, the asset turns. I think what it really takes is thousands of customers to come together to do that well, and that's perhaps maybe one of the takeaways you could take from that decision. Secondly, our focus is to be the best carrier of choice by having an asset-based model where we're in control of our container, our chassis, our dray, and whether a customer is looking to allocate by railroad or by carrier, that we're in a position to do that. The good news of this change, there's not really additional capacity being added to the marketplace, right?
It's going from a, to your point, a private to a public solution. So, we think it creates opportunities not only with really all retailers, because you want to make sure that you're diversified and you can be covered by the unique differences between perhaps a UP and a BN in the west, and a CSX and NS in the east, and certainly options that are different coming out of Mexico. And so we think we have the best mousetrap, and that's what we're taking to market. And we feel, again, one of our bullish thesis for the company is our ability to differentiate and grow within intermodal.
Is there any specific impact from Walmart not using their own boxes? Like, does that give you more options to serve to serve them, or were they, you know, on a on a different network and it didn't really matter? Like, is there any direct read-through or direct impact? I would agree that takes out capacity from the market, essentially, or at least doesn't add any.
Right.
Does that give you any more volume opportunities? I know Walmart's the biggest customer for just about everybody, so-
Yeah, and it really goes back to the differences in those networks, and our network is different than some of our other carrier competitors, and those differentiators is what we focus on, and I think we'll add value not only to Walmart, but to other customers.
Okay. So you did mention, I want to come back to the commercial, I guess, flexibility when it comes to the UP. So you made the switch last year. It seemed like there's a pretty good service product. There wasn't really a big hiccup or any transition issues, at least from our perspective. But now it does seem like there's maybe another layer to work on, so you can unpack that a little bit and give us a sense of, like, what's the focal point this year? Has there been enough changes or adjustments to really drive more of the growth? Obviously, the market has to cooperate a little bit, so maybe you can walk through that.
Yeah. Again, we think the biggest opportunity is over-the-road conversion, and maybe back to the first year. Certainly, the transition went well. We didn't get in the penalty box for any relative service issues going through that. Give Mr. Vena credit, as came in mid-year, the service product even improved more dramatically through the second half of the year. And now what we just got to work and learn to work together to make sure that we can take advantage of all the opportunity out there, particularly around how we become nimble around the over-the-road conversion opportunities. And I think that's our big learning, working together, how we can collectively adapt to what's necessary to do that commercially, as we head into 2024.
And so we're not going to waste the learnings that we went through together in 2023. The good news is we got a really good service product on the map now across our network, and so we will not be in a deficit with customers talking about service and transit. Now let's just talk about how we can put a solution together that gets the conversion that we believe is out there.
So is the service product for the rails in general, has that gotten to the point where shippers are willing to give you a look in terms of a conversion? Or is it like, well, that's nice, and we'll—we need to see a couple more quarters before we really make that decision. Obviously, it's a tough market to really have those conversations because the truck market is so loose. But is the service product getting, you know, this conversation started, or do you feel like it's still early innings to really get that ball moving?
Yeah, I think people are in different places. Well, some might be more in a show me for longer mode, but I think you hit on it there, Brian, is the over-the-road alternative, and as that starts to harden, it puts the conditions... I think the conditions are right for not only the service performance, but as we start to harden a bit on the capacity side and harden the pricing side, that will be beneficial to intermodal as well. And let's also talk about imports. We're kind of back there a little bit, right? So we needed imports to come back. It's mostly the highest correlated in our portfolio to imports is our intermodal offering. It hasn't all got to 53-foot domestic boxes yet.
A lot of in-country movement of the international box, but as those start to turn and have to get back to Asia and other places quicker, we'll start to see more transloading at the ports, and that'll be good for our intermodal product. But, you know, we went through a stretch there where the imports were really working against the volumes for intermodal.
Right. Well, and we have seen a little bit more strength, or I guess a lot more, considering the comp was pretty easy, for international, imports, you know, into the West Coast. So does that give you confidence in terms of, like, how this normally works? Not that things are normal right now, but, at least, is that a good indicator of what should come next? Like you mentioned, you do have the international, the IPI stuff, and then it starts to build on from there. So I guess the question would be: do you see signs that that's really playing out, or is it still, again, a little too early, given that we're only a couple of months into the year here?
Well, what I do know is that you need those things to start to happen to get to where you want to be. So I think it's a very, very positive sign. I think it's also a sign of the inventories are not going to be as a headwind as we've been experiencing the last 18 months. So Brian, I think all these things, obviously, in supply chain, get connected, and all that conditions necessary to get to the volumes that we think are important to get after. So very positive sign.
Okay. And how's your network from a balance perspective? Obviously, that's going back to the Walmart point. It's pretty hard to actually get in balance, especially when freight only really wants to move one way, or at least one way, in a big way. How is the Schneider network look from a balance perspective, at this point, and, you know, if there's something that needs to be adjusted, what would that be?
Yeah, I would say we still have lots of opportunity to get back to what we would consider a well-run, a well-balanced network. And this allocation season that we're going through, that's first and top of mind, is how we can feed our, feed our head haul lanes and our power lanes, and so very clear what our objectives are going through there. If there's an area that maybe we're a bit positively surprised, it would be the southbound flows into Mexico. We thought that would be a bigger and longer lead time for us to get the balance we were looking for there, and still imbalanced northbound to southbound, but we've done a really nice job of getting early returns there on the southbound side.
Still, our transcon has some work to do, and our mid-length of haul in the middle of the network has some work to do. So, again, that's what this allocation season is about, and we'll have a much better feel for that by summer.
Okay. So it does sound like you need a bit more volume, obviously, to sort of get things a little bit better.
Yeah, we just, you know, we have too much empty repositioning, and we much want to do that more on a loaded basis, drives efficiencies across the board.
In terms of stacking containers, is that sort of at the, at the peak at this point? Obviously, it's, you know, one metric, and there's a lot of different places you can stack and for different reasons. So is that kind of... Do you think there's a little bit more to do from that perspective, or is that pretty much, you know, come, come and gone, you know, at least to the peak here at this point?
No, we still have slightly above a double digit of our boxes stacked, so that's still an opportunity. We don't have any more cost into the business and to do more of that. But, as the allocation season unfolds, again, it gives us an opportunity to sweat our assets without adding additional capital or additional cost to the network. And so those are all incremental, really solid incremental margins when you can do that.
Can you talk a bit more about Mexico? Obviously, it was a big focal point on the last call, but maybe before getting into the details, like, how, how big is that for Schneider in general? I think for a lot of the companies, it's a good area of growth, but maybe not like a big impact for the current bottom line.
Yeah, we're, we're high single digits as, as our revenue base, as it relates across our portfolio out of Mexico. Depending on the cycle, we can be slightly above, double digits. But I think what excites us about Mexico is the amount of foreign direct investment the last two years on this whole nearshoring concept. That takes some time to develop, to get things built and supply chains, moving. But that, that investment, we believe, puts Mexico not only for North America, being more of our inside our scope. We get more intermediate moves when it's done here versus when it's produced overseas.
So strategically, very important to us and very important because it's so underrepresented on intermodal, moving from Mexico into the middle heartland of the country or into the southeast, just because of, up to this point, a lack of sustained capability to be reliable. And the CPKC has absolutely crushed it out of the gate, not only on the frequency of the moves, so great sailing schedule, but the consistency of the service into the Midwest. And so if there's a place that you really have to show, is this real, and convince long-held beliefs, centered on that northbound Mexico piece. For Schneider, specifically, we're underrepresented in the automotive parts area. I think 50% of the trade between the two countries center around automotive parts, and that gives us a great opportunity to extend vertically in areas that we haven't played.
And then secondly, the volumes are very strong in that part because of the size of that and the vast opportunity to convert that from over the road. So you put all that together, that's why we have the excitement level we have. And we've been in Mexico for 30 years. We move several hundred orders a day across the border on the truck, and that doesn't have to be cannibalized because there's so many other new markets that we can get after down in Mexico.
Yeah, that was interesting. You mentioned the southbound Mexico was a bit better balanced before, like, or at least in the allocation season, that came in better, because that's usually the, correct me if I'm wrong, but I thought that was the hardest part to get, you know, freight going south, because a lot of it just wants to go north.
Yeah.
Part of the puzzle to solve here.
Yeah, that's part of the pleasant surprise of probably a little ahead of where we would have expected to be on that, Brian. Doesn't mean that we're done, doesn't mean that it's balanced, but it's better than we had modeled, and that's why we're excited about it.
... Okay. So I have a few more minutes, so I'll try to get one in on dedicated and brokerage. So you've got a pipeline for dedicated a couple of hundred trucks. Is this something you can, given the scale now and how it's become a bigger part of the portfolio, is that something you can implement without too much startup cost? I mean, there's probably always going to be some sort of startup, but I guess, is the portfolio big enough where you don't have a couple of hundred trucks that can move, you know, move the needle from a startup cost perspective?
Yeah, if we look back in 2023, what we really like to do most, Brian, to get after that, is grow current operations, either larger share within current customers, maybe adjacent sites. All those bring great synergies. And if you think of a year ago, we went through probably more account trimming because of their demand level than we went through that whole process of growing as the customer grew. So that gives us a great growth opportunity just to get back, maybe when they get back to their more normal patterns, that we can see some very efficient growth, even if it's a couple of trucks per account. So that's priority one. Priority two is taking the same customer, all the processes, and taking it to another location. Again, that's more efficient.
And that's what's so important about having a healthy network business, because then the third option is when you have a green site, something you haven't done before, something specialty in nature, you can tap into the resources of your network and do that in a more cost-efficient way. And we've also learned how to use power only for a period of time to help augment in a more efficient fashion. So, you can't really avoid the startup costs completely, but there are approaches that allow you to be more efficient, and more efficient, and you can get to your profitability curves a lot quicker. And so, I would expect as we're going to come out of the first quarter, we'll be on path to what we expected.
We'd like to see perhaps us get ahead of that if we can see some return of demand on some of the operations that curtailed a bit a year ago.
So speaking of power only and brokerage, I mean, that's been a pretty good tool to bring more capacity to the market when they're... It's been challenging to do so, but obviously, brokerage is a pretty challenging market to be in right now. So where does that stand in terms of, you know, we at the bottom of brokerage, and if it stays lower for longer, which, unfortunately, it has already, what are some of the things you can do to kind of improve your own productivity or self-help, maybe from the free power perspective or some of the other initiatives you got going on?
Yeah, another good unpacker there.
You got 2 minutes.
I got two minutes, right. Well, first, feel really good about the power-only offering as we've talked about. I think that's a differentiator, particularly against the digital brokers, which evidently has it now, that profitability does matter eventually.
Turns out it does.
It turns out it does. So, so we've been able to maintain profitability through the cycle with our, logistics business, and, and again, chasing good tools to understand your cost and, and what you can do to, to maintain profitability versus just chasing volume to chase volume standpoint. So I'm really pleased with how resilient our group was there, and certainly, power only helps. It's, it's highly contractual with the customer, but more spot-based with the carrier community so that we can stay, in tune to the, to the costs, in the marketplace. As it relates to our digital, I think it's really interesting, Brian, that the whole... The more you become frictionless, automated, and digitized, you can, attract some bad actors to the space that can take advantage.
And you've seen across the industry more thefts and more attention to folks taking advantage of that. And so, our digital presence is very mature. We're not having a lot of additional investment we need to do there. We will make some integrations to Mastery. Our Master next platform that we're moving to will really be where we invest there. But we also have to be very mindful of the bad actors out there. You don't make it so easy to be seamless and frictionless that you don't have the controls in place to make sure that, from a safety and security standpoint, you're up to snuff.
So we fortunately have done that well, but it has had us unplug some things that we had placed in the process just to make sure that we didn't make ourselves a target. So it's a little interesting phenomenon. We'll figure out, I think, as an industry, how to better defend against the bad actors, but it's something to be focused on presently for sure.
Okay. Well, right on time. Thanks for unpacking all that for us, Mark and Darrell, for being here as well. Really appreciate the update from Schneider. Thanks a lot, guys.
Thanks a lot.
Thanks for having us.