Saving the best for last on day one, we have Schneider, and very happy to welcome back President and CEO, Jim Filter.
Thank you.
Jim, welcome to Laguna. CFO, Darrell Campbell, and Vice President of Investor Relations and Corporate Finance, Christyne McGarvey. Gentlemen, thanks so much for being here. Obviously, focus has been very much on the cycle, and the goods and bads that come with it, and we have seen both sides of that today. Maybe just at a high level, I will have you start with just what are you seeing out there and kind of when you consider all these moving parts. Is that a net good or a net bad guy for you?
Start out with a little bit on demand, which has been stable. There's some pockets where we're seeing some areas of strength. But the huge drivers of auto and homes, really not a lot of activity, but it's not falling backwards either. All the activity that we've seen has been in capacity . We've been talking about this for multiple years, that we saw 50,000 drivers come into the long-haul truck market in a short period of time. At a time that we had been talking about, people aren't generally moving into this industry, and they were coming in at a cost point that was far below what we saw as rational.
So we knew some things were not playing by the same rules as everybody else. We didn't precisely know it early on. But after, this was probably two years ago, we were starting to see some things already that we understood. There was no standard for entry-level driver training, and so it was really easy to go to a country, where you could claim asylum, bring drivers in, train them in a couple of hours, train them in a classroom. Yes, exactly. Then, put them on a road and what we've seen more recently that we've uncovered are ELDs, which have been in place since 2017. They were installed to make sure that drivers weren't cheating on their logbooks. But prior to 2017, it was very difficult for a driver to cheat on their logbooks.
Because you still need to be able to line times up from a waybill to your logbook to a bill of lading. But one thing that we saw, all of these ELDs are self-certified, and there was over 1,000 of them here in the U.S., only about 40 in Canada, where they're certified by the government. What you are able to do with the ELD, some of these ELDs that were self-certified improperly, is have someone in a back office manipulate your hours of service. Specifically, we were hearing about more companies that had their dispatchers in Eastern Europe, w here you could not be extradited . So if you cursed a driver, you pushed them, said, I want you to work 18 hours a day. If you are in this country and you do that, and there is a crash, you are liable.
That is the one that is still very much in front of us. They are making progress on the schools. We are saying, we knew that typically July and August, you see a decrease in demand. It was no different this year. Maybe a little bit sharper. That is coming off of higher points as well. Then, we're still seeing capacity action. We'd expect as you go through the fall, that's typically when we'll start to see demand recover further.
Got it. So, very helpful baseline. A few things to unpack there. Just starting with the seasonality point, because there has been a bunch of incoming that we've got late summer saying, hey, is this normal seasonality? Is this worse? Is this something to be concerned about? Is this something to be concerned about, or do you think it's just normal?
I think this is normal seasonality. We've seen this. There's been some differences the last few years. If there's a pull ahead or not a pull ahead, tariffs have had a lot of impacts. You strip all of that out, this looks very much like normal seasonality, but there's a run-up up until Fourth of July, then a little bit of decrease through July, August. September begins the next ramp up.
Got it. Now is a good time for our annual Schneider Laguna tradition, which started with Stephen Bruffett, which is peak season watch, because you guys usually were the first ones to tell us what peak season would look like. Do you have a sense of what that is going to be right now?
We are having discussions with customers. The programs were put in place very early this year, similar to last year. That was specifically because we were concerned that some customers might be starting their peak season a little bit earlier. It is really about making sure that our costs are being covered a s we work through those types of programs. It is a little bit difficult to know precisely what we are going to see this year, because I believe what we are looking at is, peak is going to be driven by consumer demand this year. Customers are going to start pulling in materials a little bit faster if they need to restock. But at this point, it's a little bit gray.
Got it. I want to come back to truckload in a second because I have a ton of questions there, but can we just quickly touch on intermodal? We just heard from one of your peers kind of talking about, obviously big tailwinds in the intermodal space, especially with $6 diesel, but at the same time, a bunch of costs as well, potentially being a headwind in the third quarter. How are you guys seeing that pull and push between the positives and negatives?
The market setup is stellar. We really say it's the trifecta because you have high fuel, improving truckload rates, and really good rail service. All three items are in place. We also want to grow in a very disciplined manner. If you start growing faster than your dray fleet, if you start growing and breaking your network constantly, you're not going to be able to grow your earnings. I think we were able to prove that out in Q2, where we were more disciplined in our growth and grew our earnings in intermodal double- digits.
We are going to do the same thing going forward. Just because there is a lot of opportunities does not mean you should rush out there and put every box into place. Need to make sure that we have the right dray network as well.
Got it. You are not seeing any outsized headwinds on the cost side in intermodal that would give you concern?
Well, I think that is a factor of being disciplined, that we are taking actions to make sure that we are not absorbing those additional costs. Darrell will talk about costs overall.
Sure. Not all growth is good. W e're measuring success based on earnings improvement. Dray capacity is always going to be the signal. And as capacity is constrained, we have to make decisions to make sure that if we're moving a load, that there's a commensurate return. In the short term, there could be some pain as it relates to the cost. But over a longer period of time, we think that would benefit raising prices in intermodal.
Got it. It sounds like no breaking news from you guys today, which is no breaking news is good news. But just kind of staying on this topic here, and again, $6- diesel environment, how much of an issue is that for the truckload side of the business, and how much of that will kind of immediately translate into tailwinds for the intermodal side of the business?
Well, our fuel surcharge programs are effective in being able to mitigate the cost increases. Of course, when there is very steep increases, there is always a leg, and so it kind of depends on where does the end of the month, end of the quarter land to be able to understand that. This is the value of having the broad portfolio, because there are parts of the portfolio that are going to be negatively impacted by high diesel prices and then other parts that are going to be beneficiaries. Of course, the volatility can have impacts in either direction. But over a long enough period of time, it washes out. Going back to Q1, we didn't call it out as a separate impact just because we said we are not going to claim it is a headwind in one market and then a tailwind in another. Over the long term, it balances out.
Got it.
I would agree with that.
I sort of asked your peer as well, just how quickly does customer behavior change in this environment? Do you get panicked phone calls at midnight, or are they like, hey, this is the world we live in, w e'll just revisit it . Especially given the drivers of it, which still seem very transitory although they've seemed that way for six months. Are they like, hey, we'll deal with this next peak season, or are you seeing changes of behavior right now?
We're getting calls. I'm even getting calls.
There you go.
Even in this capacity, I am getting calls from customers that are concerned about ability to get their freight covered. They are saying, hey, we have challenges with certain carriers. They have some concerns with this changing environment, want to make sure that they are going to be protected in their most important season. There has been a lot of mini-bids activity going on as shippers want to take care of that type of activity before you get into October. There has been a lot of cleanup work just trying to stay ahead of that curve.
Got it. We spoke about diesel prices, which impact both truckload and intermodal at the same time, maybe in opposite directions. Another factor that impacts truckload and logistics at the same time, maybe in opposite directions, is the impact of the Montgomery case. What are you seeing so far? What do you think happens here? You clearly highlighted the immigration regulations and ELDs as a catalyst for capacity. Where does Montgomery fit in that picture?
I will start, and Darrell will h op on in here. Obviously, part of our truckload business and asset-based business is a tailwind.
Absolutely.
Because there's been a diseconomy of scale for a long time if you're a large carrier. A large carrier, you're going to be held responsible, as we should be, for these types of cases. Unfortunately, the outcomes have been disproportionate with the actual impact, and so that's the part that a large company has had to bear, but others have not. Now, with this Montgomery case, what you're going to see is that others are going to face that same type of safety cost, either premiums or claims going forward.
It might not be borne just by that small trucking company, but others in the supply chain. Could be a broker, could be a customer that are going to have that impact. From the asset-based side, believe that this will be very much a positive. It may take some time before we see that full impact work through the supply chain. On the logistics side, we started making changes, and I think even last year we were talking about this, in the spirit of cargo theft. That we went from 60,000 carriers in our logistics business, our brokerage business, all the way down to 14,000.
Oh, wow.
It was substantial. We had to go much further than just saying, are you authorized to haul freight? We obviously started with some of the obvious things. You have a conditional or unsatisfactory rating, you can't haul for us. We realized that wasn't enough. We had to start taking a lot of other actions, and we took very broad actions to be able to reduce our carrier base to make sure that we're protecting our customers' freight. Some of those same actions, some of those same players, are likely some of these carriers that would put us most at risk. That's not to say that we don't see challenges in this space, specifically with the cost of claims, cost of insurance.
I think our position is that anything that removes capacity from the market has a potential benefit. At least it is really surprising when you think about a large asset-based truckload provider. We think that we are well positioned because we are used to investing in safety, investing in technology, qualifying drivers. We think that the standard is going to change, but the gap between where the new standard is and where large asset-based carriers are, we think that is smaller than some of the smaller players in the segment. We think capacity will leave. We think that the broker qualification process that they go through for carriers will be more stringent. We think that we have a good process. Not to say it would not tweak.
We think that shipper behavior will change. To the extent that shippers are looking at brokers becoming potentially liable, maybe the next shoe that falls would be that shippers could become liable. They would gravitate towards a large asset-based carrier such as ourselves. We think that the cost of insurance will go up. Not just in the form of premiums, a s minimum insurance requirements go up and as the carrier qualification standard changes, underwriters' behaviors are going to change. We think that it could be a situation where insurance is not even available for certain carriers. We're not going to be in that position. That's another thing that benefits us, we think.
Got it.
Long term, there is a place for brokers in the industry, moving about 30% of the freight, because there's a long tail of shipments, there's places where there's high variability. Customers and carriers look to brokerage, but we're not going to indemnify everyone out there, not every carrier.
But in the short term, the cost of a claim could go up.
Got it. Not to make you answer for your peers, but the magnitude of the carrier base reduction that you saw, do you think some of your large peers will have to undergo something similar or even more than that? It just feels like an industry-wide issue.
I believe, and everybody's going to have a little bit different number. I can tell you that there aren't 100,000 carriers out there that I think any of us would be able to look at and say 100,000 carriers are safe and should be out there on the road. I'd say there are some pretty big numbers that probably should be exiting this marketplace.
Got it.
We do think tort reform is necessary, because-
Good luck with that.
... there is uncertainty as to what reasonable care is right in this. If it is litigated on a state-by-state basis, some clarity would be helpful.
Got it. To go back to the TL side here, obviously lots of tailwinds on the supply side. Any particular signs of life on the demand side? Again, the theme of this conference so far appears to be things are fine, but not amazing. Which I think you would agree with. Do you need it to be more than that for demand to pick up? Is the industrial side looking better than the consumer side? What is the view of non-peak season demand?
Well, with the amount of supply that has exited, it has created enough demand for our services. We don't necessarily need more demand. It really is a matter of what can we do to be able to add more capacity. And we're taking a number of actions there. The number one was what can we do to improve our driver productivity? It helps the drivers, provides more capacity. Then after that, we're looking at where do we smartly start to make some investments into our driver force? Drivers that are more productive, how do we attract the right drivers? And continue to invest there.
Got it. I think, like others, you should be getting into 2027 bid season fairly shortly. Any expectations on what rates might look like? Obviously, year-over-year basis, you have a much tougher comp, but obviously with everything else going out there, it feels like you guys can still name your price.
I think there's a fairly large gap between spot and contract. We weren't going to close all of that gap this year. But, a s we're going through this year, I think we're going to look at more areas where that gap has to close, because I'm not sure that spot rates are fully done increasing. Because if our costs are increasing and the capacity is not going to grow, that will continue to grow along with the impacts of the Montgomery case.
I think all the things that you mentioned before, too, with the Entry-Level Driver Training focus and the ELDs, that will continue to push capacity out of the market, even into 2027.
Got it. So in that environment, how do we think about what the margin trajectory could look like, both in the short term and the long term? Again, do you feel like this is structural, that your mid-cycle margin goals can potentially move higher as well? Or are you looking to strike while the iron is hot and maximize for now, and then we will see where the industry ends up?
If the question is on 2027, I don't think we would proclaim today that 2027 is normal cycle because we've gone through four years of a down cycle, and typically, the down cycle mirrors the up cycle. We're in year one of recovery.
Got it. So you think it extends to 2028?
I think it extends potentially beyond 2027. However, w e've reshaped the portfolio during the downturn. Our truckload business looks different than it did four years ago. We're more heavily focused in dedicated, which we think is more resilient. We've taken a lot of cost out of the business. So $40 million last year, we have another $40 million this year. We've shown, at least sequentially from the first quarter to the second quarter of this year, what happens when we get a bit of price, i n terms of our operating leverage. With all that said, looking ahead, with supply still exiting and all the self-help actions still in place, we think there's line of sight to get to mid-cycle margins. In Q2 for truckload, we're at 8% margin. I think we'd all agree that there's probably more price to be extracted.
Demand is only stable. It hasn't inflated. Intermodal, we're at 7% with essentially no price. For logistics, we're already within our long-term margin range, because we've been opportunistic in terms of executing on specific project work. So all that momentum we're carrying into next year. We should have some tailwinds from price.
Got it. But just cycle aside, idiosyncratically, can you remind us the 2Q to 3Q margin walk? I think there were a few items there. Anything to keep in mind ?
There are a couple of things that we mentioned. We talked about in our logistics segment, we capitalized on some premium project work. Some of that project work, a lot of it ended. Not to say that there is not more that is in the pipeline. That is just something to keep track of. We also said that for dedicated there was one large customer that we lost, but we also said that we had a very strong pipeline, so it would be visible in terms of our truck count, at least in the near term.
But as those implementations get in place, that would all normalize. We talked about those things, and we also talked about peak and what happens in peak, primarily in the fourth, that we are ready to execute, but it has to show up.
As we changed our portfolio, we started growing with a lot more seasonal customers, where second quarter-
Food and beverage.
... food and beverage-
Home improvement.
... home improvement are strong in the second quarter.
Understood. What is the right size for dedicated with new portfolio? Is this it, or are you looking to make that a bigger push?
There is no defined number that it should only be a certain size. We are going to move capital to where we can get the best return. That might even mean that we move some trucks from dedicated into network if we have a better option there as well. Our goal is to be able to deploy capital to wherever we can get returns that are commensurate with our expectations.
Got it. Wanted to switch gears a little bit and focus on the long term here. I know that you guys are a very tech-focused company, going back to Quest at the time of your IPO, which was an industry-leading platform at the time. Obviously, the focus of this conference has been on autonomous. I think I've brought it up in every fireside. I believe it's come up in every single meeting that investors have had. I know you guys obviously are a leader here. You have done pilots. You're working with the autonomous technology companies. A few questions on that front. Maybe I'll just let you free-wheel at the start first.
Sure.
How do you see autonomous today? What works? What still needs work to work? Where do you see this going in the short term?
Well, I believe we're very close, that we'll start to see autonomous trucks with the driver out, not a driver in. We are getting past that point, so now we are moving from just concepts, moving into actually deploying this as a form of capacity. When you think about that, a lot of people compare this to intermodal. In a lot of ways, I believe that that is very true, that what is important in an intermodal network, there are very few intermodal companies that generate a return on capital that is higher than their weighted average cost of capital.
We are very proud of that, but the way you do that is being very disciplined as well. When we are talking about intermodal, you have to be disciplined in creating a network that has balance. Not just the hub-to-hub, but also the dray networks around them, because I do believe that we are still going to have drivers on both ends that are making final deliveries. The other part of making this work is the maintenance and the operations of that line haul truck. A truck, after it has gone 700,000 mi, 800,000 mi, the maintenance expense is about five times higher than your first year. It also has more downtime. For the economics of this to work, that truck has to run 24/7 nonstop, and if it is breaking down, you have a lot of cost on your hands that you're not able to deploy.
As we're thinking about this, where we think we will be successful is building very dense networks, and you have to have a lot of liable parties. This, we're having a brokerage business, a truckload business, intermodal really is helpful. Then, I believe our ability to build the dray networks. I believe we'll have more drivers in the future when we have autonomous trucks than what we have today. But more and more of them will be going home every single day, enjoying the types of jobs that they have, and we'll be able to grow that much faster. I believe we're very close to that point. Excited about the opportunities there.
Got it. Is it fair to say that you guys feel like you have an amazing recipe for this great dish, it just is in the slow cooker and the ingredients need to come together and get it done? Or do you think we are still at an early stage where there are still things we need to figure out that we don't have answers to?
I believe that I have this great opportunity. By the way, I don't believe this really competes with intermodal, even though I say it's similar to intermodal. Intermodal has a very different price point than over the road. Different fuel consumption. Intermodal is still going to compete very well. I think about even long-haul trucking, intermodal is maybe 5%-7% of those kind of lanes. It is all of that other freight is where I believe you will see this impact. We are very close to it. At the same time, I think the caution is you can clear every single technical hurdle, but you have other hurdles that you need
Practical hurdles.
The adaptive issues. The one thing that has us excited about us being on the precipice of this going forward is the BUILD America 250 Act, which will create a nationwide framework for EVs. That same bill also has a provision that mandates two-person crews inside of a train, o n a track with positive train control, that even if both people fell asleep, the train is going to slow down. There are an awful lot of truck drivers in this country, and I am sure concerned to make sure that they are getting these good paying jobs as well. We are going to be watching adaptive issues, and we want to support this and show people you are still going to have a job.
We're going to have jobs where you get home more frequently, and we want to help people through that. That's going to be the key part of this, so you have to do this at an appropriate pace as well.
Got it. Just a couple more questions on this topic. We see four stakeholders here, which is the autonomous technology companies, the truck OEMs, yourselves as fleet operators, and the shippers. Whose court do you think the autonomous ball is in right now? Who has the burden of execution, the burden of proof for the next phase until we get to commercial?
I think it's getting to the carriers, because we're at that spot where the trucks aren't available yet at a level of scale, but we're getting very close. I would say that the OEMs do have to create the trucks with duplicative systems, so there is a little bit of work there. I believe by next year, we'll start to see those trucks be available. I guess it's really in their court, but for a short period of time, followed by a little bit with the EVs, but very quickly it will be sitting in our hands and our opportunity to prove that we can create a really dense network that can provide a cost-effective and high-service solution for our customers.
Got it. Last question on this topic. To whatever level of detail you want, what actual work are you doing on this today? What pilots are you running? Are you talking to multiple OEMs, multiple providers? Just give us an-
We are working with two providers. We think Aurora is very good on the technology but at the same time, they're not an OEM. And so we're working with Torc who is aligned to our primary OEM as well. We want to be able to work with both models. I think both have applications. We want to be able to test both.
We will continue to do that. We have worked with others in the past. We have narrowed it down just to these two. We think they both have the opportunity to be winners. Now, there might be some other winners as well. We are focused on that. In terms of running a truck and doing one single load, we really do not learn anything new anytime we do that. We can do that, but you're not learning anything new by doing that. The rest of the work is identifying where do you want to operate? Do you have the facilities and other pieces starting to be put in place? We're a little bit early for that.
We do this type of work all the time with our modeling tools in intermodal. There's times where we've added new locations, we've taken them away. We have a very good process for being able to identifying those and then also building into our pricing tools. I think we're prepared.
Sorry, I lied. One more. I can just keep doing this.
Go ahead.
Just keeping time here. What are your conversations like with your shipper customers on this? Is there demand pull from their side because they know what's going on with the drivers? You can't just have a driverless truck show up at a Walmart location. You are like, what am I supposed to do with this? Are you having this conversation now, or does that happen in the future?
Customers are asking about this. They want to make sure that we are leaning into it, that t here is an opportunity. We are assuring them we are, when this is available, and we are going to be able to do that. They want to make sure that if there is an opportunity to take cost out of our supply chain, that Schneider is going to be there leading the way, and we are assuring them that we will.
Got it. I am done now. I will open up to the audience to see if anyone has questions. You have one here.
Hi there. Thanks for taking the question. Can you talk to initiatives you have, wage increases with the drivers, and just how you are retaining talent here, just given non-domiciled, all these initiatives here to bring in supply?
For retention, first of all, starting off, it was really important that we were focused on productivity. One, your drivers are making more money, but when drivers are productive, they are not out there looking at, should I go and do something else? We saw high single- digits improvements in both Q1 and Q2. Following that, we are already starting to look at some places that we needed to start to increase some driver pay back in Q2. Primarily, our focus is on the retention side. How do we take care of our most productive drivers, and raise, then, the pay scales as well? That is an ongoing exercise, because we have to make sure that our customers are funding it, and so it is a little bit iterative as we are focused on specific opportunities where customers are looking for capacity. If they are funding it, a portion of that is flowing back to our drivers.
Anything else? Nancy?
I know you talked about earlier how the supply-side regulations are driving enough demand to you. Is that mostly on the one-way side, or is that able to help offset maybe some of the churn you've seen in dedicated as well?
It's primarily in one way to include within logistics. It doesn't necessarily drive dedicated because within dedicated, we want to make sure the opportunities we're pursuing are truly dedicated. They're not a network-type solution that's going to fall apart in the future, and so we spent a lot of time there. At the same time, when that type of activity drives spot rates, we're always looking for backhaul to feed into the dedicated business, so it does have an impact on dedicated, but not necessarily to grow the fleet.
There's an indirect impact, especially we talked about a lot of these actions on the supply side we think are durable, so they're going to extend beyond 2026 and 2027. Spot rates obviously have an impact on contract rates, and we usually see a lag between intermodal rates and truck rates, so there's some impact, we think, on intermodal as we're kind of repricing some of those. Dedicated, obviously, is contract-based. Not all the book comes up every year. Essentially, a third or so of the book comes up every year. So depending on where spot rates are, that's instructive to contract as well.
Somebody else? Maybe a couple more to take us home here. I badgered you with autonomous questions. I'll slightly shift gears, but stick to the technology team and talk about AI, because there was a huge focus for investors maybe six months ago. It's kind of died down a little bit, which is probably good, healthy, normal as the technology matures a little bit. I know you guys have a number of initiatives there. Talk about what that means for the logistics business and indeed for the entire organization, w hat you've put in place and what the maybe margin opportunities over time.
It started with creating a structure for the organization, because we want to make sure that as we're taking actions, we're doing this and protecting the enterprise, making sure that our entire team is AI literate to understand what the opportunities are. Then we're going out and building and understanding what is truly our sovereignty, the pieces of our business that we want to protect and we don't want to make available to others. Also understanding where are those places where it really is a commodity and we should be working with partners. As we're doing that, we're looking at a number of domains and where we can deliver value back to the organization. We've had a number of those, and we've been very public on the logistics side because there's been some really great improvement in productivity multiple years in a row. The bots are negotiating rates and talking to carriers.
They do a lot of back office type work. It was also really important that we didn't just go and build this to be efficient. We focused on effectiveness first, having decision science tools that we can trust, so that you can allow that productivity to really go out and run. We are certain to take more of this now, and it's moving more towards our asset side, the work with our drivers. We've started this in our intermodal business, where we have some agentic AI that's helping our drivers out. They're able to respond much faster. We're starting to apply that to other businesses. We're applying this into our recruiting business. Make sure that we take every single call right now and actually proactively reach back out to candidates as they're moving through the process.
We want to make sure that we keep touching them. We're not just investing because we see something that we think looks pretty cool or we have a capability, but where can it generate a positive return?
Got it. Maybe Darrell, to close out, just two questions on capital use. How are we thinking about CapEx, the fleet renewal versus growth here? Also maybe M&A opportunities, do you see anything out there?
Similar to the theme, when we're talking about intermodal and even dedicated, we're focused on earnings growth and productivity. That productivity translates into what we do in terms of our fleet. If you look at our revenue per truck per week and truck, we've increased efficiency there. That has the impact of allowing us to purchase less in terms of CapEx. But we're still focused on replacement CapEx because we want to protect our age of fleet. Now, if there are opportunities to invest in growth that has a commensurate return, we're proving that we'll continue to do that.
We're also very focused on our equipment ratios. We had scaled back on trailing CapEx, because we want to make sure that our trailers to tractor ratios are tight. J ust in terms of capital use in general, w e're focused on organic growth where necessary, replacement CapEx, shareholder returns, but also M&A. We have a very successful playbook that we've used through successful acquisitions in the last five years. We're looking at quality targets, accretive targets, not fixer uppers. Places where we can use our scale to grow those targets. The proof is in the pudding. We've seen that the three acquisitions that we've done are larger to date than when we acquired them.
We are going to stick to that formula. I know we said every 12 to 18 months was our targeted cadence, but we are not going to force something if it does not make sense. But we have a robust pipeline that we are always looking at targets and, with 0.2x leverage or less, I think we have the ability to execute.
Any particular rank order of segments, logistics, dedicated, intermodal, one way?
We don't close the funnel necessarily, but in terms of our one-way network, just based on where margins have been and returns have been, I don't think it would be the best use of capital to invest there. Dedicated, the playbook has worked. We're continuing to look at those targets. Intermodal, just based on the concentration of the intermodal providers, the opportunity hasn't created itself or appeared. But that's a configuration that's in our strategic priority list that if something were to come up, we'd look at it. On the logistics side, it's really looking at the multiple that we'd have to pay and figuring out how the multiple correlates with our enterprise multiple and that math hasn't worked. Obviously, there are other pieces to consider in terms of the cost, at least in the short term. We haven't really looked at that right now.
Got it. Gentlemen, with that, we are unfortunately out of time, but that was very insightful. Tons going on, so very exciting time as well. Thank you for being here this morning.
Thank you.
Thank you.
Appreciate it.
That was amazing.