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Presentation

Schneider National, Inc. beats earnings expectations. Reported EPS is $0.12, expectations were $0.11.

Operator: Thank you for standing by and welcome to the Schneider National, Inc. First Quarter 2026 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question and answer session. Thank you. I would now like to turn the call over to Christyne McGarvey, Vice President of Investor Relations. You may begin.

Christyne McGarvey: Thank you, operator, and good afternoon, everyone. Joining me on the call today are Mark B. Rourke, president and chief executive officer; Darrell G. Campbell, executive vice president and chief financial officer; and James S. Filter, executive vice president and group president of transportation and logistics. Earlier today, the company issued an earnings press release. This release and our investor presentation are available on the Investor Relations section of our website at schneider.com. Our call will include remarks about future expectations, forecasts, plans, and prospects for Schneider National, Inc. These constitute forward-looking statements for the purpose of the safe harbor provisions under applicable federal securities laws.

Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from current expectations. The company urges investors to review the risks and uncertainties discussed in our SEC filings including, but not limited to, our most recent annual report on Form 10-K, and those risks identified in today’s earnings release. All forward-looking statements are made as of the date of this call, and Schneider National, Inc. disclaims any duty to update such statements except as required by law. In addition, pursuant to Regulation G, a reconciliation of any non-GAAP financial measures referenced during today’s call can be found directly in our earnings release and investor presentation, which include reconciliations to the most directly comparable GAAP measures.

I will now turn the call over to our CEO, Mark B. Rourke.

Mark B. Rourke: Thank you, Christyne. Hello, everyone. First, I want to thank our associates, especially our professional drivers, for their hard work navigating a dynamic quarter and safely supporting our customers. The stress in the market over the last several months is a direct reflection of structural supply rationalization, and we believe this upcycle has now gained its foothold. While we experienced headwinds from challenging weather and fuel volatility in the quarter, we were ultimately able to mitigate the impact of these factors because of the proactive actions we have taken to position the business to capitalize on improved conditions. This includes execution on our cost and productivity initiatives, investment in differentiated services and capabilities, and a disciplined approach to customer allocation events.

In a moment, James will share more perspective on the freight market before Darrell provides a more detailed financial overview of the first quarter results and our 2026 guidance. Then I will share my view on the actions we are taking to position the enterprise for near- and long-term success. After, we will answer your questions. With that, I will hand it over to James.

James S. Filter: Thank you, Mark. As we look at the freight market, the momentum we saw as we exited 2025 grew in 2026. As Mark highlighted, the quarter was negatively impacted by unusually disruptive weather in parts of the country where we have significant operations and in areas that are less equipped to manage winter storms. While weather contributed to initial supply chain disruption, we believe the tighter market conditions that followed are a function of capacity attrition we have seen over the last several quarters. The attrition is the culmination of the DOT’s actions to improve public safety by addressing noncompliant capacity, including curtailing non-domicile CDLs, enforcing English language proficiency, removing CDL mills, and targeting ELDs that enable tampering.

Based on developments to date, we expect this rationalization to occur rapidly as the mere threat of enforcement and proactive actions in certain states are driving more capacity out of the market sooner. We do not believe we have yet reached a new normal for supply, so we expect additional capacity to leave the market from here. Fuel cost inflation, which is outpacing rate recovery for the long-tail carriers, and the upcoming road check are likely to be catalysts for additional drivers to permanently exit. We believe that we will see more supply exit than what was removed by the 2017 ELD mandate while also restricting the funnel of new entrants. We continue to expect that the removal of this capacity will restore the market to more normal conditions after several years of irrational supply dynamics.

With regards to demand, realized volume in the first quarter was a tale of two halves, with adverse weather impacts in the first half giving way to increased volume in the second half as we supported customers dealing with stress in their supply chains. Looking at underlying trends, we saw a resilient consumer and signs of life in our industrial end markets, mirrored by what we saw in ISM PMI. However, overall macro uncertainty has also increased amid rising inflation expectations and diminished prospects for additional rate cuts, which adds demand risk for the balance of the year. While we have not seen any adverse impact to date, we will be monitoring changes closely. Altogether, the market is seeing increasingly reduced capacity at a time when spot prices are recovering.

As a result, many cycle indicators such as tender rejections, spot/contract spreads, and fleet utilization flashed green in the first quarter, with some of these signals at levels last seen during the pandemic. Encouraging trends seen in March have persisted into April, with continued strength in the spot market, traction in rate recovery, and volume retention in our allocation events, and indications of moderate customer restocking and seasonal volume activity. I will now turn it over to Darrell to share additional observations on first quarter performance.

Darrell G. Campbell: Thank you, James, and good afternoon, everyone. I will review our enterprise and segment financial results for the first quarter and provide insights on our full-year 2026 EPS and net CapEx guidance. Summaries of our financial results and guidance can be found in our investor presentation available on the Investor Relations section of our website. Starting with the first quarter results, enterprise revenues excluding fuel surcharge were $1.2 billion, down 1% compared to a year ago. Adjusted income from operations was $35 million, a 21% decrease year over year. Enterprise adjusted operating ratio increased 70 basis points compared to 2025. Adjusted diluted earnings per share for the first quarter were $0.12 compared to $0.16 in 2025.

First quarter results reflected strong execution across the portfolio as well as effectively capitalizing on commercial opportunities. This enabled us to mitigate headwinds from significant storms and fuel volatility. Our actions include traction on our $40 million cost savings initiatives, where we implemented additional headcount actions, and disciplined execution on our Cowen system integration synergies. From a segment perspective, Truckload revenues excluding fuel surcharge were $618 million in the first quarter, up 1% year over year. This growth was driven by improvements in revenue per truck per week. Network revenues grew 4% year over year, driven by productivity and price, with revenue per truck per week up 7% year over year and up 2% sequentially, which is atypical for the first quarter.

This more than offset truck count declines, which reflect a combination of asset efficiency efforts and growing driver scarcity. Dedicated revenue per truck per week was up modestly year over year, reflecting our focus on productivity as we take action on assets where we see opportunity to improve returns. Truckload operating income was $20 million, a 20% decline year over year. Operating ratio was 96.7%, an increase of 80 basis points compared to last year. Earnings were negatively impacted by cost headwinds in maintenance and fuel that were exacerbated by the challenges referenced earlier, as well as lower gain on sale due to delayed equipment disposal. Intermodal revenues excluding fuel surcharge were $254 million in the first quarter, down 3% year over year.

Revenue per order declined 4% and included impacts from lower length of haul. Volumes grew year over year despite a challenging comp related to last year’s inventory pull-forward that we referenced on our previous earnings call, marking the eighth consecutive quarter of load growth. Intermodal operating income was $11 million, a 21% decrease compared to the same period last year, but in line with our expectations as weather disruptions impacted maintenance costs. This was offset by cost saving actions, including lower rail repositioning costs and realizing the benefits of AI-driven headcount actions. Operating ratio was 95.7% compared to 94.7% last year. Logistics revenues excluding fuel surcharge totaled $312 million in the first quarter, down 6% from the same period a year ago, with lower volumes partially offset by higher revenue per order.

Logistics income from operations was $7 million, down $2 million year over year. Operating ratio was 97.9%, an increase of 30 basis points primarily due to the impact of lower volumes. This was partially offset by improved net revenue per order, which reflected strong spot and premium project business as well as productivity gains. Turning to our balance sheet and capital allocation, as of March 31, we had $399 million in debt and lease obligations and $228 million in cash and cash equivalents. Our net debt leverage was 0.3x at the end of the quarter. The strength of our balance sheet leaves us ample dry powder to maintain an investment grade profile and complete additional accretive acquisitions if the right target becomes available. We are confident in our proven playbook to select quality accretive targets, deliver synergies, and enhance those brands’ ability to grow profitably.

We will also continue to prioritize robust shareholder returns. In the first quarter, we returned over $22 million to shareholders in the form of dividends, which we recently raised by 5%, and opportunistic repurchases of shares under a newly authorized share repurchase program. Net CapEx was $45 million compared to $97 million last year due to timing of equipment purchases. As a result, free cash flow increased by $54 million year over year. Looking forward, our CapEx guidance for 2026 remains unchanged and is expected to be in the range of $400 million to $450 million. This primarily encompasses replacement CapEx needed to protect our Asia fleet. As we move through 2026, our priorities are unchanged, and we remain focused on capital and resource efficiency.

We believe we have runway for growth with our existing equipment. Our containers can support double-digit intermodal growth, and we continue to see positive trends in truckload productivity. Additionally, we continue to support scaling our power-only and owner-operator capacity to help extract incremental growth over the medium and long term in a capital-efficient way. As we think about our guidance, since our last update our confidence in the cost program and the realization of supply attrition has grown based on the progress delivered to date. That said, macro uncertainty has increased in the form of higher inflation expectations, softer consumer sentiment, and diminished likelihood of additional rate cuts. These factors push more demand risk to the right.

Even so, we also see a constructive demand scenario supported by a resilient consumer, continued improvement in industrial end markets, and support from fiscal policy. As a result, we are maintaining our 2026 EPS guidance of $0.70 to $1.00, which assumes an effective tax rate of approximately 24%. I will turn it back to Mark for more detail on our enterprise outlook.

Mark B. Rourke: Thank you, Darrell. As freight fundamentals continue to move back to more rational conditions, we expect the benefits of the actions we took to structurally improve the business will be increasingly evident. These actions include building on our nimble, multimodal portfolio; investments in differentiated service capabilities; a disciplined approach to prior allocation events; and $40 million and growing in cost savings actions. As cycle dynamics shift, we are already rolling out our early cycle playbook to capitalize on improving trends. This includes dynamically shifting our capacity to meet changing customer needs, quickly enacting yield management actions, and extracting returns on our cost and productivity efforts, all of which will lead to enhanced operating leverage across our segments.

In Truckload, we were disciplined in how we managed customer allocations through the down cycle knowing rates have not been where they need to be. In doing so, our spot exposure grew to nearly double its historical levels in Network. This has a dual benefit of allowing Network to immediately take advantage of improved spot rates, and it creates latent capacity to add more accretive contract-rated business. While we remain predominantly contractual in our asset businesses, we must balance our customer commitments with the need for improved rates to support our investments in service, several years of cost inflation, and the growing cost of securing capacity. We saw meaningful traction in the first quarter as spot rates were accretive to overall Network rate in February and March, with strength outpacing normal seasonal patterns.

This is the benefit of operating a scale Network solution that is able to capture premium opportunities and help shippers navigate supply chain disruptions, whether from storms or broader routing-guide breakdowns. Network will continue to support our customers as cycle conditions shift and the value of our assets becomes more apparent. Price renewals are now at the highest level since 2021, and shippers are increasingly recognizing that the tightness is not simply winter weather. A growing number of shippers who have completed their allocation season are returning to us as some carrier rates agreed upon earlier are no longer holding. We expect Network 2026 rate renewals to be in the mid- to high-single digits for the full year, and we are acting decisively with the most transactional customers where there is more ground to make up in rate recovery.

In these instances, we expect to see double-digit increases. As conditions improve, the focus on doing more with less by tightening our equipment ratios will drive even greater operating leverage. Though there is more to come, we are encouraged by the improvement in Network productivity in the first quarter. We showed strong improvement year over year, especially in March. Excluding peak holiday periods, March Network productivity was the strongest it has been since 2023. In Dedicated, rate improved year over year and versus the fourth quarter as we continue to scrutinize our portfolio to ensure assets are being deployed to their highest and best use. Looking forward, we will continue to evaluate performance across our portfolio, enabling further rate improvement while also benefiting from more accretive Dedicated haul as spot rates move higher.

As we look at our Dedicated fleet in the first quarter, we continued to ramp up new accounts that were sold in 2025. In 2026 to date, we have sold over 150 new trucks, and we are seeing a growing number of our customers asking us to expand their existing fleets. However, in the near term, this will be offset by some incremental churn. We are focused on productivity and portfolio management actions where success will be measured in revenue-per-truck-per-week improvements rather than just truck count. Driver capacity will be a constraint as supply tightens, which we believe will generate incremental Dedicated demand; we remain focused on adding durable Dedicated solutions. In Intermodal, Mexico growth continued its momentum, growing double digits.

This helped to offset softer transcon volume and the impact from lapping last year’s inventory pull-forward. Looking forward, Intermodal rate traditionally lags the Truckload market, which we anticipate will remain the case. Still, we see significant opportunities in 2026 to continue to drive volume and share gains as we lean into our asset-based model, build on the launch of Fast Track, and our differentiated Mexico offering, while taking advantage of growing over-the-road conversion opportunities amid elevated fuel and rising Truckload rates. We are already seeing over-the-road conversion with customers, and we feel well positioned to capture this growth at high incremental margins given our prior investments in trailing capacity and our ability to effectively recruit and retain company dray drivers.

In Logistics, the earnings recovery from the fourth quarter reflects our ability to leverage the complementary nature of being an asset-based provider as the cost of capacity continues to rise. In the first quarter, we positively managed our net revenue per order after experiencing a significant squeeze in the fourth quarter. We became increasingly discerning of what contractual volume was accepted, including in our power-only offering, which is primarily contract-rated. This was effective and profitable as we were able to support power-only through our Network offering while contractual brokerage volume was backfilled by greater spot opportunities and by project business in specialty verticals that we have cultivated. In closing, we are encouraged by how the business was able to navigate a dynamic operating environment that included challenges from fuel and weather.

Our results are not where they need to be. Clearly, early signals in both the market and our performance give us greater confidence in our trajectory from here. As freight fundamentals continue to normalize and capacity rationalization progresses, we are more ready than ever to benefit from improving cycle dynamics. Our methodical approach to pricing, cost control, and capital allocation combined with the flexibility of our diversified multimodal portfolio allows us to position the enterprise for strong operating leverage. With that, thank you for your continued interest in Schneider National, Inc., and we will now open the line for your questions.

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Operator: Thank you. We will now begin the question and answer session. To ask a question, please press star one on your telephone keypad. If you would like to withdraw your question, simply press star one again. We ask that you limit yourself to one question and one follow-up. Your first question comes from the line of Thomas Richard Wadewitz from UBS. Your line is open.

Thomas Richard Wadewitz: Good afternoon. It is great to hear a number of these positive comments on momentum in the business and to see it for Schneider National, Inc. as well. I wanted to ask Mark or James if you could give a sense on Network. I think your revenue per load was pretty favorable in Network, and you are talking about mid- to high-single-digit contract increases. Is there a chance that you end up seeing stronger than that? It would seem like what you got in the first quarter might point to something that could be a bit higher than that. And then the second question would be on Dedicated. How should we think about how that business can move up in an elevating Truckload pricing cycle, how quickly that can happen, and what the levers are to get some quick responsiveness in Dedicated as well? Thank you.

James S. Filter: Tom, this is James. Thanks for the question. I will start with Network and price. We gave some background on what we are seeing through allocation season, but there are a number of ways that we can extract rates: normal allocation events, turnbacks, load acceptance, and spot. We are seeing positive trends with each. With normal allocation events, we expect renewals in Network to be mid- to high-single digits for the full year, but we are seeing momentum building. Those shippers that drove the largest price decreases are experiencing double-digit increases and know they are going to have to make the largest changes. With turnbacks, we are seeing an increase in post-allocation activity, particularly with the most transactional customers.

They are feeling the impact of spot prices, trying to avoid that, and going back out to look for opportunities to contract that freight. With acceptance, more shippers are prioritizing acceptance in their metrics. That is a telltale sign they are not happy with what they are seeing with acceptance and are willing to take strategic actions to drive changes. In spot, our Network spot rate was accretive for the majority of the quarter, so there are opportunities to continue to lean in to drive pricing up to a different level. For us, that 7% increase in revenue per truck per week in Network had price as only a small part. An awful lot of what we experienced was productivity. That has been our focus because the number one place we can help our drivers, our customers, and our business is to improve driver productivity.

I am thrilled with the activities that drove productivity, because that creates leverage for our organization. We still believe we have more opportunities. We are in the early stages of implementing some AI that will help remove friction for our drivers and improve their productivity. So there is still room to run in Network. On Dedicated, our focus is that the business is durable through cycles, leaning into our differentiation, especially specialty Dedicated, and executing the early cycle playbook. In the short term, productivity will drive the most success in earnings growth, so the focus is improving revenue per truck per week rather than just total truck count. We are not slowing down; we sold over 150 trucks and we are also seeing customers ask us to increase their fleets after several quarters of shrinkage.

We will be disciplined because we want to make sure these are truly Dedicated opportunities. As the market improves, we also get more backhaul, whether contracted or spot, and I would expect continued improvement there as well.

Thomas Richard Wadewitz: Do you have a quick thought on timing? Do you see the revenue per truck per week higher in Network and then wait a couple of quarters before seeing the same dynamic in Dedicated, or is it quicker than that?

James S. Filter: I think it is a little bit quicker than that. We will see opportunities to fill that in sooner.

Thomas Richard Wadewitz: Okay. Great. Thank you.

Operator: Your next question comes from the line of Scott Group from Wolfe Research. Your line is open.

Scott Group: Thanks. Afternoon, guys. So, James, we have an environment with rising truck rates, high fuel, and seemingly still good rail service. It feels like a very good setup for Intermodal. What are you hearing from customers on that front? And do we need to be concerned about a longer lag between truck rates and Intermodal rates this time, or do you think it will be similar to what we have seen in the past?

James S. Filter: Thanks, Scott. You are correct in terms of how customers are starting to look at this, especially the most strategic customers that have moved into acceptance that there has been a change in market conditions. They are looking to take control of their supply chain. We are seeing increased demand in how they are thinking about Intermodal and what they can allocate to Intermodal. Current fuel cost is making a difference as well as their anticipation of what capacity will look like later this year. We are seeing really great service levels from the railroads. The most strategic customers also look and say, while there is plenty of box capacity, the real constraint in this industry is always dray capacity. They are looking at who can support those opportunities with their own dray, and we feel really good about that opportunity.

In terms of pricing, the over-the-road market dropped much further than Intermodal did. So, in terms of the degree of change, I am not sure we will see the same degree in Intermodal as over the road. In terms of timing, typically we say about two quarters, and from what we can see, we stay pretty consistent with that, but just not to the same magnitude.

Scott Group: Second question. Your point about utilization was interesting because in prior periods of tightening markets, we typically see unseated tractors go up and utilization go down. It sounds like you think you can get price and utilization this time. What is different to let you do that? Because if you can do it, I think it is pretty powerful.

James S. Filter: You are right. That is a powerful lever when you can get both. Initially, some of the utilization opportunities were just better freight availability. Our Network business is split between company drivers, owner-operators, and power-only. That gives us more opportunities to take freight and prioritize with our company drivers and then make sure we are driving the best mix to owner-operators. Also different is our access back into our brokerage business to find better opportunities to utilize our company drivers. We have had some AI opportunities in our Intermodal business that removed friction for our drivers, which helped as well. Bringing those together is powerful.

Mark B. Rourke: Yes, Scott. The place to feel most favorable about is that we were able to increase productivity, particularly sequentially and year over year, and did so with a pretty disruptive quarter from a weather standpoint where we lost more time than we would typically lose in a winter season because of the depth and location of the storms. That gives us encouragement that leaning into these actions will be even more powerful with more operating leverage going forward when we have less weather disruption.

Operator: Your next question comes from the line of Ravi Shanker from Morgan Stanley. Your line is open.

Ravi Shanker: Great, thanks. Hope everyone is well. Darrell, I hear you on there still being uncertainties on the macro. But I reckon your commentary on this call has probably been the most constructive we have heard from anyone so far this earnings season, yet you did not raise the guide. What more do you need to see, and when will you get the confidence that the idiosyncratic tailwinds in trucking are outweighing the uncertainty in macro?

Darrell G. Campbell: Good question, Ravi. As I mentioned in my remarks, we expected that supply would exit, and we did see supply exiting at an even more rapid pace, which is encouraging. Mark alluded to our cost and productivity initiatives and the fact that we are doubling down on some of those, and those came through, especially in the face of disruption. So positives in Q1. We are one of the very few that guide, especially for a full year. We are one quarter in, and we have a whole lot of year left. While encouraged by Q1, we have to balance that with the rest of the year, and there is some demand risk introduced based on the macro environment—higher inflation expectations and uncertainty on rate cuts. It is about balancing that there are three quarters left, and we need to see more of what we saw in the first quarter persist.

Ravi Shanker: Understood. Follow-up for James or Mark. You referred to things you are doing on the AI and tech side a couple of times. Can you elaborate with specific examples of tools or functions you are excited about, when we may see it drop to the bottom line, and maybe quantify it?

Mark B. Rourke: Thanks, Ravi. AI is focused on reducing friction in our business, particularly in places facing our driver and customer communities. We are targeting areas with leverage from a value standpoint. Early innings show that when you face those communities and remove queues so you get to information faster and prioritize more effectively, you get real impact. For example, triaging driver communications: a breakdown over the road versus a radio not working. AI can help us triage, route to the right people, and tackle the most impactful situations first. That improves service performance, improves the driver experience, and allows better cost decisions. Brokerage gets a lot of AI attention in the industry, but we are as excited, if not more so, about core asset businesses in both Intermodal and Truckload.

We are prioritizing high-impact areas, using primarily in-house development with some outside capability, particularly around voice. It is allowing our people to be more effective because they are getting to the right work at the right time. Early innings, but highly encouraging. We will continue to invest throughout 2026. We are already seeing it in results and expect more operating leverage going forward.

Ravi Shanker: Very helpful. Thank you, Mark.

Operator: Your next question comes from the line of Dan Moore from Baird. Your line is open.

Dan Moore: Good afternoon, everybody. Mark, you are going to retire in July. This is probably your last call. It has been great working with you on both sides of the fence as both an investor and a sell-side analyst, and I just wanted to wish you the very best in your retirement. Absolutely, a couple of quick questions to dovetail on Tom’s and Scott’s. Hoping to get some context around the cadence of rate repair in Network, Dedicated, and Intermodal—how we should think about each of those divisions working through renewal as we calibrate our models. Second, what was the impact from fuel and weather in the first quarter? Thanks so much.

Mark B. Rourke: I appreciate those kind remarks. Thank you, Dan. On rate recovery, it is incredibly important given the inflation we and the industry have experienced and not fully recovered from over the last couple of years. In our segments, Network Truckload typically shows the most pronounced rate change, up or down, given the options James described and how we can play our portfolio. We would expect Network to be most responsive to the upcycle. We also have a big second quarter for allocation events and expect to get through that successfully. Dedicated generally operates under longer-term contracts, but we have the ability through indexing and other items to get increases across the contract term depending on the calendar.

There is also a great opportunity because, outside of really specialty services, we can share backhaul opportunities with our customers—bringing them value and getting after yield in Dedicated by having a better pool of freight to choose from. As demand increases, that increases productivity leverage as well. So not all of it is rate recovery; throughput matters, which is why we are steering toward success being seen first in revenue per truck per week. Intermodal will lag Truckload, as James noted. We will lean into key differentiators—premium products like Fast Track and our industry-leading solution in and out of Mexico, as well as broadening services in other parts of the Mexico geography—which can influence revenue per order.

Darrell G. Campbell: On weather and fuel, these events happen every year, but this past quarter was more impactful in the short term. Negatives included increased maintenance costs and loss of productivity. On the flip side, disruptive weather can serve as a catalyst. As we got into March, we saw recovery and opportunities we capitalized on—longer-term positives from the stress. On fuel, we did see volatility and sharp movements, particularly in March; much of that moderated by the end of March.

Mark B. Rourke: In the short term, weather and fuel were negatives, but the combination of tighter capacity and disruption generally has a longer benefit than just the short-term impact.

Operator: Your next question comes from the line of Christian F. Wetherbee from Wells Fargo. Your line is open.

Christian F. Wetherbee: Thanks. Good afternoon. I wanted to come back to the guidance. Do we think that to get more confident toward the high end of the range, demand is the biggest variable? We are beginning to see some contract pricing move in the right direction, but how do you think about the upside and downside around the $0.70 to $1.00?

Darrell G. Campbell: You nailed it with demand as the swing factor. When we gave guidance three months ago, demand was the swing factor. Capacity and our self-help actions—cost, productivity, revenue management strategies—played out as expected, although supply did come out at a more rapid pace. But to get to the higher end, we needed a demand inflection. While demand was stable in the first quarter, there is more risk introduced. So it is balancing the optimism from Q1 with incremental demand risk, which on balance keeps us in our range.

Christian F. Wetherbee: Zooming out, how do you think about the margin opportunity for the Truck business in a cycle that is more supply-driven, at least for now? What can mid-cycle margins get back to, and timing?

Darrell G. Campbell: When we set our long-term margin target ranges, we assume normalized conditions. Over the past several years, we have not been in a normal environment—there has been irrational excess capacity. We are seeing signs of that capacity exiting based on regulatory actions, and we believe we are on a path back to more normalized earnings. It will take more than one allocation event; we need rate for more than one year. We are not waiting for the market—we are executing on cost and productivity, and we saw benefits in Q1 even after disruptions, which gives us optimism to continue on that path. Network has the most ground to cover but also the most visible inflection opportunity, especially given where rationalization has been most acute. Dedicated, Intermodal, and Logistics are within striking range of their long-term target ranges, and Network has notable upside.

James S. Filter: On Network, this is where we have been most impacted by irrational capacity and the early-quarter noise. We are executing the early cycle playbook and are encouraged by what we saw in productivity and price metrics. Achieving that level of productivity despite lost days in the quarter was encouraging. We still have room to go on both productivity and price to get back to our long-term range.

Operator: Your next question comes from the line of Jordan Alliger from Goldman Sachs. Your line is open.

Jordan Alliger: Hi. I wanted to come back to revenue per truck per week in the Network business. I think it was up about 7% in the first quarter. You have talked about productivity, but can you talk about the components—miles per truck per week versus revenue per mile—and how you see that developing from here? Second, can you talk about your current spot exposure and whether there is an optimal target level in a stronger Truckload environment? Thanks.

James S. Filter: On revenue per truck per week, the 7% improvement had a small amount from price in Q1. Price has more opportunity going forward. The majority was productivity. We gave more freight options to our trucks and improved efficiency. What is still ahead is the opportunity to get a little leaner on trucks, so we still have room to drive further gains from truck efficiency as well as price and productivity. On spot exposure, we increased from mid-single digits historically to low double digits last year. The ideal level depends on the market. We will handle it dynamically to maintain good customer relationships with mutual value creation and will pivot to get the best mix.

Mark B. Rourke: As we went through last year’s allocation events, we purposefully put more Network capacity into spot. We are getting benefit from that and expect to continue down that path as one of several levers—allocation, spot, acceptance—to improve yields. We are encouraged by what we saw in the first quarter and in April, and we expect to keep using spot as a lever.

Jordan Alliger: Thank you.

Operator: Your next question comes from the line of Jonathan B. Chappell from Evercore ISI. Your line is open.

Jonathan B. Chappell: Thank you. Good afternoon. On Logistics, last quarter the margin was pretty close to zero, and now you turned it around quickly in one quarter in a backdrop that is usually more difficult for traditional brokerage, even though revenue is down. Was the improvement more structural—cost and productivity? And as we think about the starting point, do you continue to get margin improvement if volume picks up through the rest of the year?

James S. Filter: Thank you. We are proud of our Logistics business and its differentiation. Across the industry, rising third-party carrier costs can weigh on contract-rated business, especially power-only. Our earnings recovery reflects our strategy with three parts. First, we aim to be a trusted partner, investing in new capabilities and rapidly expanding verticals. That differentiation has enabled us to become a sole-source provider in those areas and sell additional value-added services. Second, we are seeing early productivity benefits from AI enhancements that structurally lower cost to serve, enabling us to capture incremental volume at very low cost. Third, being an asset-based provider is complementary; as the cost of capacity rises or uncertainty increases, we can pivot quicker, and it gives customers more confidence to utilize our Logistics solution over a non-asset solution. We believe this strategy gives us a strong footing going forward.

Mark B. Rourke: We certainly had a net revenue per order squeeze in the fourth quarter. In the first quarter, we were more discerning on acceptance of contract business, particularly with transactional shippers, so we could pursue more spot. Nearly half of Logistics remains under contract, but we were nimble around the edges, which showed up in the net revenue per order recovery. Our tools and technology investments, particularly around pricing and acceptance, allow us to be very nimble when there is market disruption or inflection like we saw in the first quarter.

Jonathan B. Chappell: In the context of the guide, each quarter in 2025 the margin deteriorated sequentially and troughed in the fourth quarter. Now you are starting at basically the same point—would you say the anticipation is that each quarter improves sequentially, and that is how you get to the midpoint, as it relates to Logistics contribution?

Mark B. Rourke: Looking at our guide, we expect improvement from the first quarter. We feel very good about our controllables—cost management and productivity initiatives James has led. The swing factor is demand. We have not seen weakness to date, but because we guide for the full year, we must balance the resilience of the consumer with consumer sentiment and fuel’s impact on pocketbooks. Our customers are watching that closely. We are encouraged by the industrial side with manufacturing investments, which could offset. Net, we are balancing gives and takes.

Darrell G. Campbell: We also noted in January and in this update that our guidance is second-half weighted. Seasonality indicates more earnings in the second half.

Jonathan B. Chappell: Got it. Thanks, Darrell, Mark, and James.

Operator: Your next question comes from the line of Ariel Luis Rosa from Citigroup. Your line is open.

Analyst: Hi. This is Ben Moore on for Ari. Thanks for taking the question. Adding to Tom’s and Dan’s questions, can you remind us of the average length of your Dedicated contracts and how your Dedicated contract renewals are bucketed by percentage each quarter so we can model the shape of the lift to Dedicated rates throughout the year?

Mark B. Rourke: Good question. Our general range in Dedicated is three to five years, with the median at three. Because of the long tail and the size and scope of our Dedicated—about 8,500 trucks—renewals are fairly evenly distributed by quarter and by year. On average, with a three-year median, roughly a third of the book is in renewal in a given calendar year. We also have greater than 92% to 93% retention of our Dedicated contracts.

Analyst: Thank you. You mentioned the 150 trucks you sold. You did not have many big conversations in 4Q that could have supported 1Q implementations, but you expected those to pick up in February and beyond. How are those trending, and how many gross trucks were added in January, and how many are expected to be added in February, March, and April?

James S. Filter: Our early cycle focus in Dedicated is productivity, not just the number of trucks. Our key metric is revenue per truck per week. We see opportunities to pull some trucks out of existing customers and improve efficiency. That is the metric we are focused on going forward.

Analyst: Great. Thanks for the clarification.

Operator: That concludes our question and answer session. I will now turn the call back over to Mark B. Rourke for closing remarks.

Mark B. Rourke: Thank you, operator. Once again, I want to recognize our professional drivers, maintenance technicians, and the entire Schneider National, Inc. associate team for their commitment to safely supporting our customers during a quarter that was marked by significant disruptions. As we discussed today, we are optimistic that the much-anticipated freight recovery driven by substantial supply reductions has finally taken hold, and our versatile multimodal platform is built to provide us and our customers with flexible freight coverage options. This optionality, along with our diligent efforts to manage costs, invest wisely in technology, and prioritize people and asset productivity, positions us to achieve strong operating leverage and advance toward our long-term margin goals in the midterm.

On a personal note, as Dan mentioned, this does mark my thirty-sixth and final Schneider National, Inc. earnings call before James S. Filter’s transition to president and CEO in July and my move to executive chairman. I want to express my heartfelt gratitude to this group and to our shareholders for your steadfast support and thoughtful engagement throughout each of those quarters. It has been both a privilege and a joy. I also know that with James, Darrell, and Christyne, you are in great hands moving forward. As always, we thank you for your interest in Schneider National, Inc.

Operator: This concludes today’s conference call. Thank you for your participation. You may now disconnect.

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